Africa has $29.5 trillion in mineral reserves, about 20% of the world’s total, but $8.6 trillion is equivalent to unexploited resources, according to a report by the African Finance Corporation (AFC) released on Monday (9).
“Africa has one of the most diverse and strategically significant mineral reserves in the world, with an estimated value of $29.5 billion in mines, approximately 20% of the global total,” reads the Compendium of Africa’s Strategic Mineral Resources, released by the AFC, which is dedicated to promoting strategic investments in infrastructure and industry and is one of the main players in the Lobito Corridor in Angola.
Of the total $29.5 trillion, “$8.6 trillion remains unexploited, equivalent to about 2.5 times the continent’s annual gross domestic product (GDP),” reveals AFC, which regrets that countries earn only a small portion of the value of these resources that belong to them.
The problem, it explains in the document, is the transformation of raw materials into value-added products, that is, “the ability to transform mineral wealth into productive assets, infrastructure, industrial capacity, regional value chains, and competitive manufacturing platforms.”
As an example, the report highlights the value of transforming iron ore into steel, stating: “Africa’s $2.8 trillion worth of iron ore at the mine gate translates into an estimated $25.4 trillion worth of steel.”
Processing is defined as fundamental for the continent to be able to claim the value of its resources.
“Until now, these gains have remained largely unrealized because the continent is stuck in a system of structural misalignment; the three pillars of mineral project viability—natural resources, enabling infrastructure (especially energy and transportation), and demand—rarely coexist,” the document reads.
The Compendium aims to demonstrate the need for structural change in the way countries view their resources, arguing that “better regional planning and a more integrated approach to Africa’s mineral development” is needed.
Thus, instead of listing minerals critical to the energy transition, the document focuses “on infrastructure development, industrialization, energy systems, food security, and manufacturing resilience,” arguing that minerals are only important as fuel for national and regional economic systems, which makes iron ore or mineral fertilizers “as, if not more, strategically important for Africa’s transformation as energy transition minerals.”
Source: Lusa
