A new report launched by the World Economic Forum (WEF) highlights the urgent need to unlock investment in Southern Africa’s critical minerals to meet surging global demand for clean energy and low-carbon technologies.

The report, launched on August 29, identifies key financing gaps facing the region and showcases concrete case studies that can inform efforts to accelerate investment, drive inclusive local growth and position Southern Africa as a cornerstone of the global energy transition.

Produced in collaboration with the Development Bank of Southern Africa (DBSA), with McKinsey & Company as knowledge partner, and under the WEF’s Securing Minerals for the Energy Transition (SMET) initiative, the report focuses on ten countries.

These include Angola, Botswana, the Democratic Republic of Congo (DRC), Madagascar, Mozambique, Namibia, South Africa, Tanzania, Zambia and Zimbabwe.

The WEF explains that sub-Saharan Africa, as a whole, holds nearly 30% of known global reserves of the critical minerals, including copper, cobalt, lithium, graphite, manganese, chromium, vanadium and platinum group metals, which are essential to the manufacture of low-carbon technologies.

Despite this potential, the report highlights that Africa currently attracts less than 10% of global exploration spending, revealing a stark gap between potential and capital flows.

“Southern Africa has the mineral reserves the global energy transition urgently needs, but finance flows are not keeping pace,” says Jörgen Sandström from the WEF Centre for Energy and Materials.

“Our new research not only reveals the scale of the gap but also practical, proven ways to close it. Sustainably unlocking this potential will be critical to both regional prosperity and global energy security,” he comments.

“As we confront the major transitions of our time – from climate change to cyclical economic headwinds – Africa must be an active participant in shaping its own development path,” adds DBSA CEO Boitumelo Mosako.

“If extraction continues in the same manner as historical practice, the continent will once again miss the opportunity to convert its mineral wealth into structural socioeconomic transformation for all.”

Drawing on consultations with local and international experts led by SMET, the report identifies eight core financing barriers affecting the region, namely policy uncertainty, investment risks, energy access, transportation barriers, innovation lag, pace of industrialisation, skill gaps and demand volatility.

In response, it highlights replicable and scalable solutions, illustrated by case studies from the region.

These include the Lobito Corridor – a new railway-focused initiative to unlock export access for DRC and Zambia by linking their mineral-rich regions to Angola’s Port of Lobito.

Backed by the EU, the US, Angola, the DBSA and others, the project includes upgrades to existing rail lines and a planned 800 km extension to ease bottlenecks and foster regional trade and investment.

This is also illustrated by Namibia’s green iron initiative. In April, Namibia launched Africa’s first industrial-scale green iron facility, powered entirely by renewables.

The new plant uses solar, battery storage and the region’s largest electrolyser to produce green hydrogen for zero-emissions iron production. Backed by the EU-Namibia Green Hydrogen Partnership, the WEF explains that plans are to scale production from 15 000 t/y to two-million tonnes a year by 2030.

The report also highlights Zambia’s mining policy reform, with Zambia accounting for about 3% of global copper output, producing 700 000 t/y. The WEF notes that new national reforms, including new mining legislation, are boosting investor confidence and promoting greater local participation. Copper production is expected to reach one-million tonnes by 2026, with a national target of three-million tonnes by 2031.

SOUTHERN AFRICAN POTENTIAL

During the launch of the report, Sandström highlighted that, while Africa’s potential to be a leader in the energy transition, the region faces persistent challenges, including energy shortages and limited access to financial support, which continues to slow industrialisation, economic growth and broader development.

He, therefore, emphasised the need for public-private, private-private and public-public partnerships to help scale clean energy and critical minerals development.

“Cross border collaboration is really essential in this space,” he said.

Also speaking at the launch, South Africa’s Energy and Electricity Minister Dr Kgosientsho Ramakgopa discussed the role of the Integrated Resource Plan (IRP) in South Africa’s energy transition.

The Minister also mentioned his department’s plans to drive nuclear energy production.

“We want to build a nuclear industry,” he said, adding that further investment in transmission infrastructure is also urgently needed.

He argued that the need for critical minerals for clean energy technologies provides opportunities for the resurgence of mining in the country as a “sunrise industry” arguing, however, that extraction of critical minerals requires appropriate funding.

To this end, Mosako warned that, while Africa is abundant in the minerals needed to drive clean energy technologies, if extraction continues to be characterised by the export of raw materials, limited local beneficiation and limited community impacts, then the continent risks once again missing the opportunity to convert its mineral wealth into structural socioeconomic transformation.

“Our mission has always extended beyond infrastructure financing – it is about enabling inclusive growth, alleviating poverty and deepening development impact across the continent,” she said.

“As we confront the major transitions of our time, and include climate change-induced challenges, cyclical economic headwinds and technological disruptions, Africa must be an active participant in shaping its own development growth path. Africa must be an active participant in shaping its own development.

Meanwhile, African Union Development Agency – New Partnership for Africa's Development, or AUDA-NEPAD, CEO Nardos Bekele-Thomas similarly pointed out that perceived risk in Africa regarding investment pertains to policy uncertainty, regulatory inconsistency and infrastructure gaps.

“This is a risk we can control, this is a risk we must fix, and it starts with us – with governments creating multiple projects, transparent systems and stable regulatory environments, we must derisk ourselves to attract the right kind of capital,” she said.

Bekele-Thomas thus argued for integrated value chain financing, noting that financing should be structured in a way that builds sovereign and resilient economies.

She also argued that  capital flowing into the region should not just extract its resources, but create lasting wealth, ownership and capability for the people.

“If you want to finance a mine, your proposal must include financing for the local processing plant, the business case for a solar plant should be linked to powering a local industry, not just feeding the grid.

“We must use project finance as a tool to build our industrial base. This is the foundation for resilience, beyond extraction and even beyond beneficiation, the true wealth of critical mineral lies in the multipliers, the transport corridors, the power grids, the supply chains, the water systems, the [small, medium-sized and microenterprises] and the knowledge economies they unlock,” she said.