PREVIEW
Political and economic risks are holding back countries hoping to benefit from a critical minerals boom
Africa’s gold miners, great and small, are reaping benefits from the mounting geopolitical chaos. The gold price, which surged 20% in 2024 due to escalating political risks, has risen another 10% since Donald Trump took over the United States presidency. Traders are spooked by the possibility of tariffs on US gold imports, inflation from the global trade war initiated by Trump, and a weakening US dollar. All signs indicate that the gold price, now at $3,000 an ounce, will continue to rise.
South Africa’s industrial gold mining output has declined, slipping from the world’s top producer in 2006 to eighth place today. Yet rising gold prices this year have boosted the share prices of South African miners. Gold Fields operates the country’s largest gold mine, South Deep, while Sibanye-Stillwater runs the second and third largest, Kloof Gold and Driefontein. Gold Fields’s share price hit a record high on the Johannesburg Stock Exchange (JSE) on February 10, while Sibanye-Stillwater’s share price has risen 9.3% since Trump took office on 20 January. But it remains below its 2022 peak.
The New York Stock Exchange and JSE-listed AngloGold Ashanti has gold mining assets worldwide, including in Congo-Kinshasa, Ghana, Tanzania, Australia, and Brazil. The company’s share price has climbed from 455 rand (US$24.37) on 20 January to R575 today, an increase of 26%.
Power prices and reliability still worry South African industrial gold miners (AC Vol 64 No 21, Eskom chaos is at the heart of the growth crisis). There have been few power cuts in the past year but Eskom’s electricity prices have nearly tripled from 76c/kWh in 2015 to 219c/kWh today, with a 12.7% increase from 2024/2025 to 2025/2026 alone.
Regulatory obstacles for generating solar power have been lifted, allowing mining companies to generate an estimated 200MW. But this remains a fraction of the industry’s 10GW consumption, which accounts for 30% of Eskom’s total output.
Production hit
The rising cost of electricity has hit South Africa’s once burgeoning ferrochrome industry. South Africa has the world’s largest reserves of chromite and is a leading producer of chrome, but its ferrochrome output has sharply declined. Most smelting is now done in China, where electricity is cheaper.
Switzerland-based Glencore, in a joint venture with South Africa’s Merafe Resources, announced in February that it might suspend at least half its remaining furnaces, risking over 2,000 jobs. At the African Mining Indaba in early February, Mines Minister Gwede Mantashe accused China of exacerbating economic hardship by flooding the market with chrome and crashing prices, leaving South African miners struggling to survive.
The South African government and its African peers are advocating beneficiation, as Mantashe did at the Indaba, but the steady shift of chrome smelting from South Africa to China is pointing in the opposite direction.
African mining ministers often cite Indonesia, which has cornered the nickel market and requires in-country refining for international investments. Brian Menell, a South African and former executive director at Anglovaal, and current CEO and Chair of TechMet, which invests in mining projects, contends that only Chinese investors can deliver this vertical integration, leading to increased Chinese control of the sector.
Indonesia’s biggest nickel mine, Weda Bay, is owned by China’s Tsingshan Holding Group. The second largest, PT Halmahera Persada Lygend, is owned by China’s Ningbo Lygend Mining. Brazil’s Vale owns the third, Sorowako, and China’s Huayou owns the fourth.
This year’s Indaba in Cape Town was the largest ever, according to the organisers. Chinese companies were strongly represented among the many exhibitors, but less so on discussion panels. Big Chinese mining companies with sizeable African assets do not see western international mining conferences as effective venues for business deals and debates. The share of Africa’s mining assets acquired by Chinese companies is growing steadily. This means fewer assets are available for discussion, analysis, promotion, purchase, and sale at conferences such as the Indaba.
This worried former US President Joe Biden, whose administration persuaded Congolese President Félix Tshisekedi to block a proposed sale of Congolese mining assets from Kazakhstan’s Eurasian Resources Group to a Chinese company. However, the Biden administration failed to attract any American companies to bid.
The Trump administration believes it has a solution, ordering a 180-day pause to all investigations under the US Foreign Corrupt Practices Act on 12 February. The 1977 FCPA prohibits US companies from making illegal payments and bribes, but Trump called its implementation ‘a disaster’ and claimed that his executive order would ‘mean a lot more business for America’.
Those operating as fixers and facilitators across the continent, linking international companies with African politicians, will be delighted by Trump’s move. Human rights and civil society campaigners are outraged, while the response from US business has been muted. US companies might be tempted to offer more bribes to win contracts but Trump’s economic gambles could backfire, harming the US economy and prompting voters to return the Democrats to power in late 2026, and possibly the Oval Office in 2029. A Democrat administration would almost certainly reinstate the FCPA. Investigations into which companies exploited its suspension for illegal payments could follow.
If American investors cannot be secured, the US government considers investment from pro-western countries, especially Saudi Arabia and the United Arab Emirates. London’s Financial Times reported in mid-February that a Middle Eastern entity – we hear it is the UAE’s International Resources Holding Company – has been bidding for Glencore’s Congolese mining assets.
Last year, Saudi Arabia’s government pledged to invest US$10 billion in African mining ventures over the next five years. In January, Zambia’s Mines Minister Paul Kabuswe announced that his government had signed an MoU with Saudi Arabia on mining exploration and expected a mining deal this year. Manara, a joint venture between the Saudi Arabian Mining Company and Public Investment Fund, was reportedly close to securing a minority stake in the Zambian copper and nickel assets of Canada’s First Quantum Minerals. Although the UAE is the main destination for most of Africa’s artisanal mined gold, it has made little progress in its industrial mining sector.
In March 2024, the IHC, chaired by Tahnoon bin Zayed al Nahayan, bought a 51% stake in Zambia’s Mopani Copper Mines from Glencore. The shift of Sahelian countries away from France and towards Russia has led to increased Russian interest in their mining sectors (AC Vol 65 No 21,Junta’s stance threatens uranium exports). Russia’s Nordgold operates the Bissa and Bouly gold mines in Burkina Faso. In November 2024, Niger’s Mining Minister Ousmane Abarchi announced that the country was ‘actively seeking’ Russian investment in its uranium mines. Although there was no obvious Russian presence at the Mining Indaba, Burkina Faso and Guinea, two Russia-leaning Sahelian countries, had busy booths in the exhibition hall.
Hundreds of thousands across Africa work as artisanal miners, particularly for gold, with their number swelling every time the metal’s price rises. South Africa was gripped in late 2024 and early 2025 by the drama in Stilfontein, North West Province, when police starved out illegal artisanal miners – known locally as zama zamas – working in abandoned industrial gold mining shafts. The zama zamas, tightly controlled by heavily armed criminal cartels, with alleged links to Lesotho’s political parties, did not easily emerge from the shafts. Around 170 miners finally surfaced, but the death toll was at least 78, probably more.
South Africa has over 6,000 abandoned industrial mine shafts, many of which have not been properly sealed as required by law. These shafts have been invaded by artisanal miners, many of whom are Mozambican and Lesotho nationals. Mantashe’s department has taken minor steps to create a formal, legal space for artisanal mining, but the vast majority of zama zamas work illegally. Speaking at the Indaba, Mantashe expressed no sympathy for the deceased miners at Stilfontein, describing artisanal mining of this nature as a suicide mission and criminal.
Other African countries with large artisanal gold mining populations, particularly Ghana and Tanzania, are adopting a different approach, shifting away from criminalising artisanal miners. Instead, they are working to expand the legal space for these miners to operate. This is gradually creating a new supply chain of legal, artisanal-mined gold that could be refined, not only by Indian and UAE-entities little due diligence, but also by refineries adhering to the strict requirements of the Good Delivery List of the London Bullion Market Association.
The major challenge for African governments is implementing and enforcing environmental regulations in the artisanal mining sector. Pollution and environmental damage, particularly from mercury use, are rising alarmingly across the continent. The available evidence suggests that the continent’s environmental agencies have a much better record of regulating legalised artisanal mining and enforcing controls than dealing with illegal operators.
Congo-Kinshasa updates its scandale géologique
When asked by audience members which minerals would perform well in the short term, and which were the best long-term bets, commodity experts at the Cape Town Mining Indaba on 3-6 February were unanimous: gold and copper in the short term, and copper in the long term.
Cobalt has gained significant attention due to its key role in electric battery production. But manufacturers are wary about the high proportion of reserves in Congo-Kinshasa, which entails navigating the country’s political economy (AC Vol 66 No 3, After seizing Goma, Kigali’s rebels head south). Numerous alternative battery designs reducing or eliminating cobalt are in development and are expected to gain prominence soon.
Congolese ambitions of becoming the OPEC of cobalt are hindered by moves from China’s Contemporary Amperex Technology Co Ltd (CATL). The world’s biggest car battery manufacturer, CATL holds a 23.75% direct stake in the Kisanfu copper and cobalt mine in Congo-K’s Lualaba Province, operated by China’s Molybdenum Co. Ltd, and an indirect stake in CMOC’s Tenke Fungurume mine, also in Lualaba (AC Vol 63 No 15, Beijing recalibrates its contracts).
CATL has used its dominant position in cobalt mining to increase production and lower the metal’s price, benefiting its battery manufacturing. Cobalt prices have fallen steeply, currently trading at around US$21,550/tonne, down 11% since the beginning of 2025, and far below the $95,250/tn peak in 2018.
Copper’s price trend is very different. It began the year at $8,685/tn and climbed 11% to $9,812/tn in mid-February. Long-term, copper’s fundamentals seem strong, because of its use in such a wide range of goods, from vehicles to washing machines and fridges. Congo-K holds 8% of the world’s copper reserves, ranking fifth globally and first in Africa. Congo-K produced 2.84 million tonnes of copper in 2023, surpassing Peru to become the world’s second-largest producer, behind Chile. This is a significant increase from the 343,000tn produced in 2010. With new Congolese copper mines coming on stream, particularly Ivanhoe’s Kakula deposit, output is expected to rise further (AC Vol 60 No 18, The China price). Production is held back by the lack of power available to mining companies from the grid. New hydroelectric sources are still years away from completion.
Another worry for investors in Congolese copper and cobalt mines is the worsening security situation in the country’s east. Katanga is a long way from the Kivus, and there is a vast swathe of territory between Bukavu, which fell to rebels on 14 February, and Lubumbashi. Yet the ease with which the M23 and Rwanda Defence Force (RDF) have been capturing territory in eastern Congo-K worries companies (AC Vol 66 No 4, As Kinshasa fumes, Kigali plots its next move). During the Second Congo War (1998-2002), the Rwandan advance south from the Kivus was stopped by a battle in December 2000 at Pweto on the northern tip of Lake Mweru, resulting in the Zimbabwean army capturing the town from the Rwandan army and the Congolese Rassemblement Congolais pour la Démocratie militia. The RDF and RCD never entered Katanga again. This time round, however, there are no Zimbabwean or Angolan troops to push back and little prospect of that changing.
In the Kivus, M23 and the RDF are consolidating control over mines in their captured territories. So far, this mostly involves artisanal tin and coltan mines. Their output is probably being funnelled towards Rwanda and laundered through the International Tin Supply Chain Initiative traceability scheme there. The M23/RDF have not yet captured significant gold mining territory but they are advancing towards areas with rich artisanal gold mines. Should they succeed in ousting the Wazalendo (patriots) militia, they will probably seize these mines as well.
The M23’s advance alarms Johannesburg Stock Exchange-listed Alphamin, which operates an industrial tin mine in Walikale, North Kivu. Its share price dipped from 14 rand just before Goma fell on 31 January to R12 soon after. If the M23/RDF make a concerted push for Walikale, the market response is likely to be more severe.
Simplistic commentary claiming the Kivu conflict is a resource war is wide of the mark. Yet mineral assets are certainly advantageous for the parties to the conflict. For the Rwandan government, they help to ensure, just as they did during the first two Congo wars, that its military operations in the country pay for themselves.
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