Miners Struggle To Raise Capital For African Critical Minerals Projects

The global energy transition depends on a revolution in mining. Technologies such as solar panels, wind turbines and electric vehicle batteries require a diverse set of minerals, many of which are only just starting to be mined in large volumes. These 'critical minerals' will also play a key role in defence technologies of various kinds, meaning that control of their supply chains is of crucial strategic importance to global powers.

Africa possesses around half of the world's cobalt and manganese reserves, along with a fifth of natural graphite, and significant deposits of other minerals including lithium, nickel and copper. Some estimates suggest Africa contains around 30 of all critical minerals, though the true extent of the continent's riches could be even greater since vast areas remain under-explored.

"The global energy transition is already creating massive demand for lithium, cobalt, and other minerals," says Veronica Bolton Smith, CEO of the Critical Minerals Africa Group, which represents companies in the sector. She notes that the International Monetary Fund has forecast that critical minerals could add at least 12 to Africa's GDP by 2050.

However, extracting these minerals and bringing them to market is far from straightforward. Even the earliest surveying and exploration stages of a project can be very costly. The total cost of bringing a single mine into production can run into billions of dollars. Finding the cash to finance these projects poses a major headache.

"The geology is there in Africa, but we just don't have the capital base unlocking these projects," says investment banker Tshepo Magagane, a partner in The Critical Minerals Fund, an investment entity established to take African mining projects into production