KIM POLLEY: How will Africa use its resources leverage?

Africa’s mining sector is in the middle of an important shift. The global investment landscape has changed, and the continent’s rich reserves of key minerals — copper, cobalt, lithium and platinum group metals — are in high demand. The money is flowing, but the question remains regarding who benefits. The recent Mining Indaba made one thing clear — African governments have more leverage than ever, but using it requires a shift in mindset.

The time has passed when foreign investment could be categorised as “high politics”, something reserved for heads of state and elite diplomacy. The reality is that the biggest geopolitical forces today are reshaping the flow of capital.

Global demand for Africa’s minerals is skyrocketing, and investors — especially from the Gulf Co-operation Council (GCC) countries — are looking for opportunities. The UAE alone has committed $110bn to Africa since 2019, with a focus on energy and infrastructure. The point is simple: the capital is coming. But African governments must be proactive in shaping how it lands.

Too often foreign investment in mining follows a familiar script: multinational companies dictate the terms, promising jobs and revenue while governments hope for the best. But hope is not a strategy. 

Governments and business leaders need to present commercially attractive opportunities that also serve national interests. That means thinking beyond royalties and looking at long-term value creation including local processing, infrastructure development, and workforce training. If investment terms are structured well, they can create lasting economic effect rather than just filling state coffers temporarily.

The urgency of getting this right cannot be overstated, particularly when it comes to employment. Africa’s youth population is growing at an unprecedented rate. By 2050, the continent will have the largest workforce in the world, yet youth unemployment is already a crisis. In SA youth unemployment sits at more than 45%, a ticking time bomb for economic and social stability. 

The mining sector has a role to play, but not in the same way it once did. Automation and efficiency mean that large-scale job creation in traditional mining roles is unlikely. Instead, the focus needs to shift to new skills like AI-driven exploration, digital monitoring of extraction sites, and environmental rehabilitation. 

Collaboration with the private sector is essential, and political leaders who fail to deliver on economic opportunities for young people may quickly find themselves dealing with wide-scale social unrest, or even out of office.

Technology is at the heart of this transformation. AI and data-driven decision-making will reshape Africa’s mining future. The reality is that many African countries are negotiating mining deals from a position of weakness — not because they lack resources, but because they lack accurate, up-to-date geological data. Underfunded geological surveys and incomplete data sets mean investors often have a better understanding of a country’s resource potential than its own government. This creates a power imbalance that leads to poor deals.

That is about to change. AI-powered geological analysis is making it faster and cheaper to assess mineral reserves with greater accuracy. Countries that invest in this technology will find themselves in a far stronger position when sitting across the table from foreign investors. Instead of taking the first deal that comes their way, they’ll be able to negotiate from a place of knowledge, setting terms that better reflect the true value of their resources.

The Mining Indaba put these issues in the spotlight, but talking about them is not enough. The reality is that Africa has leverage because its minerals are essential to the global energy transition, and investors are eager to get in. The question is how governments choose to use that leverage? Will they default to the status quo, allowing others to extract the bulk of the value? Or will they take control of the investment narrative, ensuring that mining drives long-term national growth?

What happens next will define Africa’s place in the global economy for decades to come. One thing is certain, waiting on the sidelines is no longer an option.

Polley is managing partner: senior emerging markets at Instinctif Partners.