With its success in nickel production, Indonesia has become a model for those seeking to harness “resource nationalism” for domestic benefit. Substantial foreign investment, particularly from China, has been a key variable for Indonesia to become a globally relevant industrial center for nickel processing. While there are insightful lessons that policymakers from mineral-resource-rich African countries can learn from Indonesia, there must be caution in implementing some of Indonesia’s policies, especially export bans as they have had mixed results and depend heavily on external factors.

Africa holds a third of the world’s mineral reserves, including critical minerals essential to the green energy transition. Yet, the continent remains underexplored, underdeveloped, and underfunded, receiving just 8–10% of global exploration and investment. Global demand for minerals like copper, nickel, cobalt, and lithium is expected to generate $16 trillion over the next 25 years, with sub-Saharan Africa potentially capturing $2 trillion. However, to realize this potential, Africa must shift from raw extraction to value-added processing. Developing local processing industries would boost economic diversification, job creation, tax revenues, and technological advancements while reducing dependency on raw-material exports.

To achieve this, African governments must prioritize coherent, forward-looking policies that emphasize value creation. Commissioning technoeconomic studies to identify key supply chain opportunities will help guide investments. Establishing Special Economic Zones for critical minerals can attract international investors and foster industrial hubs. Leveraging the African Continental Free Trade Area to create robust commodity markets would position Africa as a competitive player. Additionally, streamlining regulatory processes, supporting carbon-free power projects, and advancing infrastructure investments through global initiatives such as the US PGI and EU Global Gateway can facilitate critical mineral processing and transport networks.

Export bans, though well-intentioned, often backfire. Historically, they have reduced exports, weakened global trade positions, and worsened infrastructure challenges in energy, transportation, and logistics. Without effective governance and political stability, such policies risk stalling economic growth rather than stimulating it.

By focusing on industrial infrastructure, value-added processing, and policies that promote long-term diversification, African countries can move beyond the limitations of raw extraction. With transparent governance and strategic investments, the continent can transform its mineral wealth into a driver of sustainable economic development.

This report is the second in a series on the critical minerals sector in Africa, and is part of the Africa Center’s Critical Mineral Task Force.

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 Nov 26, 2024

The US won’t gain a lead in the competition for Africa’s critical minerals without innovation

By Chris Moorman

If the United States wants to differentiate itself from competitors in the critical mineral sector, it will need to form partnerships with African countries that are economically feasible, environmentally sustainable, and ethical.

Africa China

AfricaSource Aug 14, 2024

Critical minerals investment must avoid the mistakes of the past in African mining

By Rama Yade, Sibi Nyaoga

By getting mining investment right, the United States can set a new precedent for its collaboration with African countries in other areas, such as health, security, and technology.

Africa Energy Transitions

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: Workers monitor the nickel melting process at a nickel smelter of PT Vale Tbk in Sorowako, South Sulawesi province, Indonesia, March 30, 2023. REUTERS/Ajeng Dinar Ulfiana