As a top producer of numerous critical mineral commodities, Africa is set to benefit from the rapid increase in the rate of global energy transition, with the continent’s mining industry playing a role in sourcing and supplying these critical minerals for use in clean energy initiatives. Exporting these critical minerals as raw materials, however, reduces Africa’s trading position to one of price takers, and the current disruptions in global supply chains are hampering the trade of these commodities in Africa, with mining companies subject to long delays and higher costs. The African Continental Free-Trade Area (AfCFTA), implemented in 2021, acts as a strong impetus for African governments to address their infrastructure gaps, streamline their supply chains, boost their manufacturing capacity and overhaul regulation relating to trade, cross-border initiatives, investment-friendly policies and capital flows. The trade in mineral commodities in Africa is expected to benefit from these reforms, but the extensive infrastructure development needed to facilitate the movement of goods across borders will take time.

In depth

Africa is the world’s top producer of numerous critical mineral commodities. With the rapid increase in the rate of global energy transition, the continent’s mining industry has a role to play in sourcing and supplying these critical minerals for use in clean energy projects, manufacturing capacity, electric vehicles and other sustainable solutions. The continent is a large supplier of bauxite, chromium, cobalt, copper, diamond, gold, iron ore, platinum group metals, lithium, rare earth metals and zinc, for example, with most of them being exported as ores, concentrates or metals.

Exporting these critical minerals as raw materials, however, reduces Africa’s trading position to one of price taker, and subjects the continent’s mining sector to changes in global commodity markets. Adding to these challenges, the current disruptions in global supply chains are hampering the trade of these commodities in Africa, with mining companies now subject to long delays and higher costs. This high level of global and economic uncertainty has the added effect of holding back investment in new mining projects, placing more obstacles in the way of a continent that desperately needs to be able to capitalize on its vast mineral resource base.

Enter the African Continental Free-Trade Area (AfCFTA), implemented in 2021, and intended to act as a strong impetus for African governments to address their infrastructure gaps, boost their manufacturing capacity, streamline their supply chains, and overhaul regulation relating to trade, cross-border initiatives, investment-friendly policies and capital flows. The trade in mineral commodities in Africa is expected to benefit from these reforms, but the extensive infrastructure development that is needed to facilitate the movement of goods across borders will clearly take time.

Projects are already in progress to boost continent-wide infrastructure needs. For example, Tanzania’s construction of the Standard Gauge Railway (SGR) Project is expected to provide a safe and reliable means for efficiently transporting people and cargo to and from the existing Dar-es-Salaam port. Other large projects underway include the Trans-Maghreb Highway in North Africa, the North-South Multimodal Corridor, the Central Corridor project and the Abidjan-Lagos Corridor Highway project.

According to the World Economic Forum’s (WEF) latest report – AfCFTA: A New Era for Global Business and Investment in Africa – investment in transport and logistics will be crucial to enable the trade of goods in Africa, including in the mining sector. The report notes that AfCFTA is expected to increase trade demand by 28%, which will lead to a requirement for “2 million trucks, 100,000 rail wagons, 250 aircraft and more than 100 vessels by 2030”.

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