Current production of critical minerals is largely insufficient to keep up with rapidly growing global demand for cobalt, nickel, manganese, and other minerals that are essential for new green technologies.

Africa has a significant opportunity to capitalize on the large-scale investments currently unfolding in the global mining sector: Roughly one-third of the world’s metal reserves including copper, cobalt, lithium, and manganese are found there. If the continent can move beyond extraction to maximize value through refining, it has the potential to become a major global hub for the mining industry.

However, the extreme volatility of natural resource revenues leaves African economies vulnerable to external shocks from fluctuating commodity prices, which can lead to substantial economic downturns. Additionally, the capacity limitations and operational bottlenecks within African governments often hinder the effective conversion of resource revenues into productive investments and long-term benefits. Given that minerals are inherently finite resources, there is a risk of declining trade balances as the surge in mineral earnings may be offset by increased imports of goods and services. Concurrently, other sectors of the economy may experience a decline in exports, particularly those disrupted by the rapid expansion of the critical minerals sector, potentially leading to the phenomenon known as “Dutch disease.”

To mitigate these risks, many mineral-rich nations have established sovereign wealth funds as tools for fiscal and financial planning, supporting both short- and long-term policy objectives. The primary purpose of these funds is to manage mineral revenues transparently and sustainably, protecting domestic economies from the volatility of strategic mineral and petroleum revenues while promoting long-term economic stability. Industrialized and developing nations alike have adopted sovereign wealth funds as a mechanism to stabilize government spending, shield against inflationary shocks, and serve as an intergenerational savings tool for finite resources.

In the African context, effective management of natural resource revenues presents a unique opportunity to drive long-term economic development. By adopting best practices, these revenues can be leveraged to invest in human and physical capital, build economic buffers to weather external shocks, and create lasting financial reserves. Transforming mineral resources into financial or physical assets can benefit citizens and foster broad-based economic and social development.

Mamadou Fall Kane is a nonresident senior fellow at the Atlantic Council’s Africa Center. He also is the deputy secretary of Senegal’s Strategic Orientation Committee for Oil and Gas, a committee created by the president to strengthen the management of natural resources following Senegal’s accession to the Extractive Industries Transparency Initiatives. He was energy advisor to the Senegalese president from 2016 to 2024. He graduated from Sciences Po Paris before completing his education at the Ecole Polytechnique of Paris in economics and public policy. He also holds an executive master’s degree in management and finance in innovation from the University of California, Berkeley.

Report Sep 23, 2025

The critical minerals boom is an opportunity to integrate public health into mining operations

By Connor Gregory, Ciara M. Weets, and Rebecca Katz

Africa is central to the global push for cleaner energy, including the continent’s stocks of critical minerals that power green-energy technologies. But a race to extract more minerals poses public health risks, from the occupational hazards miners suffer to new disease outbreaks in mining camps. There’s a better course for investors and African governments.

Africa Economy & Business

Report Jul 1, 2024

From greenfield projects to green supply chains: Critical minerals in Africa as an investment challenge

By Aubrey Hruby

This report provides a snapshot of Africa’s mineral wealth and mining industries, draws out the similarities between the mining and infrastructure investment attraction challenges, describes the competitive landscape African nations find themselves in, and makes innovative recommendations—namely to the US government—to rapidly accelerate investment in sustainable mining industries in African markets.

Africa Economy & Business

AfricaSource Mar 27, 2025

Prioritizing access to critical minerals will require prioritizing Africa

By Benjamin Mossberg

Access to critical minerals is an urgent national security issue. The United States must view investments in African energy, mineral, and mining—key to securing this access—with similar importance.

Africa Energy & Environment

The Africa Center works to promote dynamic geopolitical partnerships with African states and to redirect US and European policy priorities toward strengthening security and bolstering economic growth and prosperity on the continent.

Learn more

Image: A man walks past an electronic board displaying movements in major indices at the Johannesburg Stock Exchange (JSE), in Sandton, South Africa, August 1, 2025. REUTERS/Siphiwe Sibeko