Surging global demand for critical minerals has given African governments greater leverage over mining investors. They are using it to require more local processing, increase state ownership and direct more business to domestic companies, changing where investors put their money and how they develop projects.

Africa produces around 70% of the world’s cobalt, three-quarters of its manganese and close to one-fifth of its copper. Yet the International Energy Agency (IEA) estimates that the continent captures less than 1% of the value generated by manufacturing clean-energy technologies and their components.

Chinese, US, European and Gulf investors are competing for access to these minerals, allowing African governments to demand better terms and turn to other partners if companies refuse.

Their goal is to keep more mineral revenues and industrial activity within African economies while creating local jobs and developing expertise.

The results are starting to show. Zimbabwe has made its first lithium-sulphate exports, Mozambique has opened a $200mn graphite-processing plant, Nigeria has commissioned a $250mn lithium facility, and Guinea is building state-owned mining and domestic refining capacity.

The trade-off is higher costs and greater investment risk. Processing requires reliable power, transport, finance, skills and customers, while sudden export bans can leave miners without a market before local plants are ready.

The key question is which African countries can make local mineral processing commercially competitive without driving foreign investment elsewhere.

Governments tighten control over mineral value chains

Export controls are the most direct instrument. Zimbabwe has used successive measures to restrict shipments of raw lithium ore and, most recently, lithium concentrate.

Guinea announced restrictions on unrefined-gold exports in June 2026. A decree issued in early July established a 90-day transition period, after which gold must be refined in Guinea before export. A 2023 Namibian government measure restricts exports of unprocessed lithium, cobalt, graphite and rare-earth minerals.

Nigeria’s 2024 licensing policy requires applicants for new mining rights to present local-processing plans. Mozambique’s Mining Law, signed in June 2026, combines export controls with state ownership. It generally prohibits exports of raw or semi-processed minerals unless the mines minister grants an exemption linked to an approved processing plan, and requires Empresa Nacional de Minas (ENM), the country’s state-owned mining company, to receive a minimum 15% non-dilutable, free-carried interest in mining projects.

Other governments are increasing public ownership. Mali’s 2023 Mining Code permits the state to hold 10% free of charge and acquire another 20%, while 5% must be offered to Malian private investors. Its accompanying Local Content Law strengthens domestic procurement, employment and technology-transfer obligations. Guinea is pursuing a more operational model through Nimba Mining, which has acquired bauxite assets and plans to expand into alumina, gold and base metals.

Other countries are concentrating on local suppliers. Zambia’s 2025 local-content regulations require miners to allocate 20% of core procurement spending to local companies from 2026, rising to at least 40% within five years.

Tanzania’s 2025 amendments require affected foreign suppliers to form joint ventures in which a wholly Tanzanian-owned company holds at least 20%.

Some governments are using incentives instead. Senegal’s 2016 Mining Code applies a 3.5% royalty to gold refined domestically, compared with 5% for gold exported raw or refined abroad. South Africa caps royalties at 5% for refined minerals and 7% for unrefined output. It published a draft Mineral Resources Development Bill in May 2025, while its Critical Minerals and Metals Strategy promotes greater beneficiation and localisation.

These measures sit within Africa’s Green Minerals Strategy, adopted by the African Union, which promotes regional value chains under the African Continental Free Trade Area (AfCFTA), an agreement designed to reduce trade barriers and create a single African market for goods and services.

Results remain uneven. Some governments are creating the conditions needed for mineral processing, while others are imposing requirements before sufficient power, infrastructure and finance are available.

Processing investment begins to take shape

The clearest early progress is in lithium and graphite, where large deposits have attracted investment in local processing. In Zimbabwe, Zhejiang Huayou Cobalt (SSE: 603799), the Chinese battery-materials producer, commissioned a $400mn lithium-sulphate plant at Arcadia through its subsidiary Prospect Lithium Zimbabwe, with annual capacity of around 50,000 tonnes.

It made Africa’s first commercial shipment of lithium sulphate in April 2026, moving Zimbabwe beyond exports of spodumene concentrate into an intermediate chemical used to produce battery-grade lithium carbonate and hydroxide. The plant is Chinese-owned, however, and cannot accept material from third-party miners.

Plants proposed by Sinomine Resource Group (SZSE: 002738), the Chinese mining group, and Sichuan Yahua Industrial Group (SZSE: 002497), the Chinese lithium producer, remain under development.

Mozambique opened a Chinese-owned graphite-processing plant at Nipepe in Niassa province in January 2026. DH Mining, the Chinese graphite miner, has invested around $200mn in the operation, which can process 200,000 tonnes annually and employed 890 people at inauguration. The company says a second phase could lift employment to 2,000. The facility was built before the law was introduced, but demonstrates the kind of investment its processing and state-participation provisions are intended to encourage.

Nigeria added another Chinese-backed project in July. Diamond New Energy, working with Jiuling and Canmax Technologies (SZSE: 300390), commissioned a $250mn lithium mining and processing facility in Nasarawa State with stated ore-processing capacity of 6,000 tonnes a day. The Nigerian government says it has created more than 1,000 direct and 2,000 indirect jobs.

Guinea is combining domestic processing with direct state participation. Nimba Mining, created after the government took control of former Emirates Global Aluminium bauxite assets, has exported more than 5mn tonnes of bauxite since its creation and is targeting 10mn tonnes in 2026. It plans to reinvest profits in an alumina refinery and a base-metals project.

The strategy broadened in September when Nimba signed an agreement with Glencore (LSE: GLEN) providing more than $300mn in pre-financing and the marketing of 10mn-12mn tonnes of bauxite annually for five years. Guinea’s government is also discussing possible Glencore investment in alumina refining and energy projects as it seeks to expand domestic processing.

On August 14, Nimba Mining launched Landaya Gold, an exploration and development joint venture with Australian gold producer Resolute Mining (ASX/LSE: RSG). The venture and the planned alumina and base-metals projects are not yet operational. Separately, a $30mn gold refinery in Conakry is expected to process 530 tonnes annually initially, eventually rising to 733 tonnes.

Local-content policies are also helping domestic mining contractors grow. Ghana’s Minerals Commission says mining companies increased the share of their procurement spending going to Ghanaian businesses from 51% in 2020 to 66% in 2024.

More than $10.1bn went to Ghanaian businesses over the five-year period, helping companies such as Engineers & Planners and Rocksure become major mining contractors. However, the $10.1bn includes services and imported goods sold by Ghanaian suppliers, as well as goods manufactured in Ghana.

Further downstream, Morocco has secured a €100mn African Development Bank loan for Gotion High-Tech’s (SZSE: 002074) first $1.3bn battery-gigafactory phase. The Chinese-led project will produce lithium-iron-phosphate batteries, cathodes and anodes, primarily for Europe. In the DRC, Ivanhoe Mines’ (TSX: IVN) Kamoa-Kakula smelter produced its first copper anodes in late 2025 and has 500,000 tonnes of annual nameplate capacity.

New capacity is being built, but progress remains uneven. New African processors, state mining operations and domestic contractors are emerging, but Chinese companies own or operate much of the new lithium, graphite and battery capacity. The plants increase processing undertaken in Africa, but do not automatically transfer technology, ownership or the highest-value manufacturing stages to African businesses.

New rules reshape project economics

For foreign miners, stronger state-ownership, processing and local-content requirements change both project economics and the risks that must be assessed before capital is committed. A free-carried state interest dilutes private ownership while leaving investors to bear the full cost of developing the project. Compulsory processing adds capital expenditure and exposes miners to power, logistics and chemical-processing risks beyond extraction.

Local-procurement rules can build suppliers, but may initially increase costs where domestic capacity is limited. Export bans create the greatest immediate risk because they can remove a project’s route to market before alternative processing is available.

Zimbabwe shows how companies are investing in response to the rules, but also the problems with putting them into practice. Its 2022 prohibition on raw-lithium exports helped accelerate investment in concentrators, while the planned January 2027 ban on concentrate has pushed producers towards lithium-sulphate plants. But miners asked the government in June 2026 for another six months to complete processing facilities.

After abruptly suspending concentrate exports in February, the government allowed shipments to resume under company quotas in April, conditional on further processing commitments and subject to a 10% export tax. One integrated producer can already export lithium sulphate; rivals face the possibility that plants will not be ready when the full ban takes effect.

Mozambique’s new mining law also changes project economics. ENM receives a minimum 15% stake without contributing capital, leaving private investors to finance the project with a smaller ownership share. The effect of the new export restrictions remains unclear because the government is still preparing implementing regulations and deciding which minerals will be classified as strategic.

Policy uncertainty raises investor risk

Across Africa, new mining laws can create uncertainty for existing operators and lenders when governments do not make clear whether the rules apply to established agreements. This can lead to contract renegotiations or claims under investment treaties. It can also raise financing costs before the rules are enforced, adding to the direct cost of any mandatory state equity stake.

In Ghana, foreign mining companies were directed to change how they operate rather than give the state an equity stake. The country’s Minerals Commission ordered Newmont (NYSE: NEM), the US gold producer, AngloGold Ashanti (NYSE: AU), the global gold miner, and Zijin Mining (HKEX: 2899; SSE: 601899), the Chinese metals group, to transfer specified activities to wholly or majority Ghanaian-owned contractors by December 2026. The Ghana Mineworkers’ Union said the government temporarily paused the deadline on May 26 pending a policy review, but no outcome had been publicly announced by mid-August.

Before the reported suspension, Newmont sought an extension to 2027, which regulators rejected; AngloGold Ashanti said it was transitioning its Iduapriem arrangements, while Zijin Mining began preparing tenders and technical systems. The policy may create capable local contractors, although the union says contractor employees can receive substantially lower pay and weaker benefits than directly employed workers.

The most severe disputes arise when governments seek to apply tougher terms to established operations. Barrick Mining (NYSE: B; TSX: ABX), the Canadian gold and copper producer, suspended Loulo-Gounkoto in Mali after gold was seized and exports blocked during a dispute connected to the 2023 Mining Code.

Under a November 2025 settlement valued at around $430mn, Barrick agreed to a package of payments and offsets. The company subsequently disclosed a CFA143bn ($253mn) settlement payment. Mali returned operational control and Barrick agreed to withdraw its arbitration proceedings, but only after months of disruption.

For investors, the key difference is between tough rules and rules applied unpredictably. Companies can model royalties, equity dilution and processing expenditure. Retrospective changes, unclear transition periods and interrupted exports are harder to finance and can redirect capital towards jurisdictions offering comparable resources with more stable terms.

Power and infrastructure remain the biggest constraints

Africa has the minerals, but beneficiation depends on power, infrastructure, finance and industrial capacity. Refineries, smelters and chemical plants require continuous power, high-volume transport, specialised inputs and customers willing to underwrite output. A country can possess a large deposit and still be a high-cost location for processing it.

Power is the principal challenge. For refined copper, the IEA estimates that energy costs in Africa are 25% higher than in Latin America and account for 44% of production costs, reflecting expensive electricity, unreliable grids and dependence on off-grid diesel.

Poor rains cut output from Zambia’s hydropower system, forcing electricity rationing and increased imports in 2024 and 2025. Meanwhile, the government plans to raise annual copper production from 890,346 tonnes in 2025 to 3mn tonnes by 2031.

The 100 MW Chisamba solar plant opened in 2025 to supply First Quantum Minerals (TSX: FM), the Canadian copper producer, but further generation and transmission will be required if new mines and processing plants proceed.

Transport costs determine whether processed minerals remain competitive after they leave the plant. Many deposits are landlocked, while railways and ports were designed to move bulk ore to foreign markets rather than connect mines with regional industrial centres. Guinea’s $20bn Simandou project shows the scale of the infrastructure needed. Its mines are connected to more than 650 km of railway and a new deep-water port.

The Lobito Corridor provides the Copperbelt with a shorter Atlantic route and has carried Congolese copper to Europe, but its planned extension into Zambia is not expected to reach financial close until late 2027. Better export infrastructure can reduce mining costs, but it will not create local processing unless countries also develop reliable power supplies and industrial sites.

Even existing smelting capacity can become a bottleneck. Zambia suspended a 10% duty on 271,742 tonnes of copper-concentrate exports in 2026 because extended maintenance and technical problems at domestic smelters created stockpiles. That decision was commercially necessary, but it demonstrates why processing mandates require spare capacity and realistic exemptions.

Capital is the third constraint. Processing facilities require large investments with long payback periods, while sovereign risk, currency volatility and uncertain regulation raise African borrowing costs. Chinese groups have an advantage because they can combine mine finance, construction, processing technology and long-term offtake.

Development banks, Gulf investors and Western-backed infrastructure programmes can widen the funding pool, but projects will only be bankable if they have reliable mineral supplies and committed customers.

Regional processing could overcome national limitations

The scale needed for profitable processing means countries may have to work together rather than build separate national industries. Neighbouring mines can share power, railways, industrial parks and processing plants, reducing costs and ensuring a steady supply of minerals through commodity cycles. Such regional arrangements also require governments to align regulations, tariffs and border procedures, which is often harder than announcing a national export ban.

In its high-potential scenario, the IEA estimates that more refining could increase the value of Africa’s minerals market by nearly 75% to $120bn by 2040. This is a best-case scenario rather than a forecast. Reaching it would require investment, reliable power and transport, and processing plants that can compete internationally.

Which countries are best placed to benefit?

The countries best placed to benefit are not necessarily those imposing the toughest rules.

Morocco is among the best placed, with an industrial base already supporting higher-value processing. Renault and Stellantis vehicle plants and more than 250 automotive component companies provide skills, supply chains and customers for locally produced battery materials and batteries. Proximity to Europe, trade agreements and expanding renewable-energy supply strengthen its position.

South Africa has Africa’s most developed mining-industrial base, including smelters, refineries, engineering expertise and deep financial markets. However, power, rail and port problems and regulatory delays have weakened investment. Restoring infrastructure and accelerating approvals are more pressing than additional beneficiation rules.

The Zambia–DRC–Angola corridor offers the greatest regional opportunity. Zambia and the DRC provide copper, cobalt and smelting expertise, while Angola provides Atlantic access through Lobito. Shared railways, power and processing facilities could cut costs, but require coordinated policies and completion of planned infrastructure.

Guinea offers an infrastructure-led model. Simandou’s railway and port can support large mining projects, while state-owned Nimba Mining plans investments in alumina, gold and base metals. Its new Glencore agreement broadens its financing and marketing options, but success will depend on whether planned refining investment materialises, infrastructure supports wider industry and state participation is managed commercially.

Ghana, Tanzania, Namibia, Nigeria and Mozambique have combinations of minerals, ports, contractors and processing capacity, but none yet has all the conditions needed to process minerals locally at internationally competitive costs. Regulation can support investment where demand and infrastructure exist, but cannot replace them.

McKinsey, the consulting firm, estimates that regional mining clusters, more efficient project development and new technology could generate up to $40bn in additional value and more than 3mn jobs in Africa by 2035.

Export bans and ownership rules will not deliver that alone. Successful beneficiation requires reliable power, transport, skills and customers, often across regional rather than national supply chains. Governments that build this capacity before imposing beneficiation requirements are more likely to retain investment, jobs and mineral revenues; those that impose costs too early risk driving projects elsewhere.