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The global race to secure the minerals powering artificial intelligence, clean energy and advanced defence technologies is accelerating. Africa should be one of its biggest winners.
The continent holds more than a quarter of the world’s known critical mineral reserves, including some of the richest deposits of copper, manganese, bauxite and lithium.
Yet fewer than one in every 10 critical mineral projects has secured financing or advanced beyond the feasibility stage, according to a new McKinsey report.
The report warns that unless African countries fix long-standing infrastructure, financing and policy challenges, the continent risks missing one of the biggest mining investment opportunities in decades despite holding many of the minerals the world increasingly depends on.
Demand for energy-transition minerals is projected to grow by an average of 4.5% annually through 2035 as governments and companies invest heavily in artificial intelligence infrastructure, electric vehicles, renewable energy and advanced manufacturing.
At the same time, geopolitical tensions and supply chain concerns are forcing countries to diversify where they source critical minerals, placing Africa at the centre of the global competition.
Africa’s biggest advantage is becoming its biggest frustration
According to McKinsey, the continent holds more than 60% of global reserves of platinum group metals, cobalt, chromium and tantalum. It also accounts for 37% of manganese reserves, 25% of graphite reserves and about 10% of global copper reserves.
Despite that advantage, Africa continues to lag behind mining powerhouses such as Australia and Canada in turning discoveries into producing mines.
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The consultancy estimates that Africa receives only about $1.2 billion in exploration spending annually, roughly half the level attracted by either Australia or Canada, even though Africa is larger than China, Europe and the United States combined.
Instead of flowing into a broad pipeline of mining projects, investment is concentrated in a handful of large assets capable of absorbing political and operational risks, leaving many commercially attractive deposits undeveloped.
Why investors remain cautious
McKinsey argues that geology is no longer the main obstacle. The bigger challenge is everything surrounding the mine.
Many projects continue to face ageing rail networks, limited port capacity, unreliable electricity, permitting delays, regulatory uncertainty, community disputes and high financing costs.
Those constraints increase development costs and delay production, making projects less attractive to investors.
The report cites Guinea’s Simandou iron ore project, South Africa’s Kalagadi manganese mine and Tanzania’s Mahenge and Nachu graphite projects as examples of developments that faced lengthy delays because of financing, regulatory or infrastructure challenges.
McKinsey says African mines are often more expensive to operate than similar mines elsewhere despite having high-grade ore, largely because of infrastructure inefficiencies and weaker operational performance.
A $40 billion opportunity still within reach
Despite the challenges, McKinsey believes Africa can still emerge as a global leader in critical minerals.
The consultancy estimates that improving infrastructure, accelerating mine development, adopting advanced technologies and developing regional mining clusters could unlock as much as $40 billion in additional value across Africa’s mining ecosystem.
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Those reforms could increase Africa’s GDP by about 4% and create more than three million jobs by 2035.
One of the report’s biggest recommendations is the development of mining clusters, where neighbouring operations share railways, ports, power infrastructure, processing plants and other facilities instead of building them independently.
McKinsey estimates that four critical mineral clusters in Southern Africa alone could generate between $15 billion and $20 billion in additional revenue and create about 1.85 million jobs, while iron ore and bauxite clusters across Guinea, Liberia and Sierra Leone could generate another $17 billion and support approximately 1.3 million jobs.
AI could transform African mining
The report also argues that artificial intelligence could help solve many of the industry’s long-standing productivity problems.
Applying AI to geological exploration could improve drilling success rates, while smart mining systems, automated equipment and predictive maintenance could lower operating costs and improve equipment performance.
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McKinsey estimates that widespread adoption of generative AI could add between $5.3 billion and $8.5 billion in economic value to Africa’s mining industry.
The consultancy points to companies already using AI to identify new mineral deposits and says technology will become increasingly important as miners seek to shorten project timelines and improve returns.
The next mining winners won’t simply own the minerals
McKinsey argues that the next phase of the global critical minerals race will not be won by countries with the richest deposits alone.
Instead, it will favour those able to build competitive mining ecosystems through reliable infrastructure, faster project execution, supportive policies and greater use of technology.
For Africa, that means its geological advantage alone will not guarantee success.
The continent has the resources the world increasingly needs. Whether it captures a larger share of the economic value generated by those resources will depend on how quickly governments, investors and mining companies can turn mineral wealth into operating mines.
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