Mining in Africa
Investment Opportunities Overview

The energy transition is compressing it. The DRC shipped roughly 170,000 tonnes of cobalt in 2023, over 70 percent of global output. Mozambique's Balama is one of the few large natural graphite operations outside China. Sinomine paid $180 million for Zimbabwe's Bikita lithium in 2022; Huayou Cobalt paid $378 million for Arcadia. The U.S. DFC committed $250 million to the Lobito Atlantic Railway. MIGA is underwriting projects it would have declined in 2018. DFI co-financing drops the effective cost of capital by several hundred basis points and makes governments measurably less willing to alter terms retroactively, because the penalty extends across every development finance relationship the country maintains. Anyone who reads mining research has seen some version of this argument. The returns do not come from the macro case.

Between 2010 and 2014 Côte d'Ivoire hired Fugro and CGG to fly high-resolution aeromagnetic and radiometric coverage over the Birimian greenstone belt. Line spacings resolved structures the 1970s maps missed. Endeavour Mining's Ity CIL expansion, Fetekro, Perseus Mining's Sissingué, finds along Boundiali and Korhogo, all within five years. Companies that staked from early data access paid a tenth of what latecomers paid for adjacent hectares.

This is worth dwelling on because the mechanism is so specific and so repeatable and so ignored. Guinea outside Simandou, the Central African Republic, interior Mozambique: all mapped at 1960s resolution, all sitting on geology comparable to proven provinces next door. Guinea's geological service was in procurement discussions for a modern airborne survey in 2023. When modern data drops for any of these countries, a staking rush follows. It has happened often enough that calling it a pattern is conservative. Tracking geological survey procurement notices is grunt work. It produces nothing most of the time. When it produces something, the lead time advantage over the broader market is measured in years, not months.

Kamoa-Kakula, copper above 5 percent grade where 1.5 percent is attractive, was found because artisanal miners had been pulling malachite off surface exposures for years before Ivanhoe showed up. Across Katanga, the Birimian belt, the Great Lakes tantalum provinces, most significant discoveries of the past two decades were preceded by ASM concentrations. Ten million people examine rock and sediment every day across hundreds of thousands of square kilometres. Exploration teams that map ASM before designing drill programs find targets faster and cheaper.

ASM creates community risk too. Overlap between large-scale concessions and active artisanal sites is common because both respond to the same geological signals. Displacement without accommodation produces conflict. The projects that formalize ASM operators into their supply chain instead of excluding them get traceable material, contracted suppliers, and a social license that the displacement approach destroys. BMW's cobalt sourcing policy and the EU Battery Regulation require third-party verification. Mines with Copper Mark or RMI certification get 5 to 10 percent above benchmark on their cobalt, per traders on the Lubumbashi-Durban-Rotterdam chain. Mines without it, many of them Chinese-operated, sell into a separate, lower-priced market.

Now. The Chinese position in African mining gets treated in Western policy discussions as if it were a monolith directed by Beijing, and this is just lazy. CMOC acquired Tenke Fungurume for $2.65 billion from Freeport in 2016. Zijin holds 39.6 percent of Kamoa-Kakula. Below these large transactions, private Fujian-based cobalt traders locked up dozens of smaller DRC operations through prepaid offtakes signed between 2015 and 2019 at $25,000 to $35,000 per tonne. Cobalt hit $81,000 in March 2022. These traders compete with each other. They overpay for assets. Some of them run mines at standards that would get an ASX-listed company delisted. The fragmentation matters because it creates specific, exploitable gaps: offtake contracts approaching maturity (screening for expirations in the next 24 months identifies producers whose revenue understates near-term earnings), ESG certification advantages for non-Chinese operators, and occasionally distressed asset sales when a Chinese parent faces financial pressure at home.

Eskom. Everyone knows the numbers. $200 to $400 per ounce added to South African gold costs. Shaft flooding remediation above $100 million per incident at Sibanye-Stillwater and Harmony. Deep Witwatersrand mines with continuous baseload ventilation and dewatering loads are structurally unviable on a grid that fails 100 days a year.

What gets far less attention is DRC hydro. Installed capacity under 2,800 megawatts against roughly 100,000 megawatts theoretical. Ivanhoe funded rehabilitation of the 72-megawatt Mwadingusha plant and Koni on the Lufira to supply Kamoa-Kakula at $0.03 to $0.05 per kilowatt-hour. Diesel is $0.25 or more. Over a mine life measured in decades, that differential is not a cost advantage. It is a different category of operation. Several companies are now acquiring small hydro concessions along Congolese and Zambian rivers and structuring them as separable corporate entities, on the logic that reliable power generation in Central Africa has enough non-mining demand to carry standalone value. This is untested. The directional logic holds given the severity of regional power scarcity.

Gécamines smelted copper and cobalt around Lubumbashi from the 1920s through the 1980s. Slag heaps assay 1.5 to 4 percent copper, 0.3 to 0.8 percent cobalt. ERG built acid leach operations on them through Boss Mining. DRDGold retreats Witwatersrand gold tailings. No drilling, no blasting, no shafts. Material on surface, comminuted, assayed repeatedly. Capital intensity per tonne of recovered metal runs below greenfield. The Copperbelt alone has hundreds of millions of reprocessable tonnes. Mining conferences give this category almost no airtime because a slag heap does not photograph as well as a drill core with visible gold. The mismatch between conference appeal and economics here is stark enough to be useful as a contrarian signal.

The DRC reclassified cobalt as a “strategic substance” in 2018. Royalty from 2 to 10 percent. Copper from 2 to 3.5 percent. Tanzania in 2017 hit Acacia Mining with a $190 billion tax assessment over concentrate undervaluation. The number was absurd by design. It was a negotiating position. Settlement: $300 million. New code requiring export-point valuation by contained metal. The African Tax Administration Forum drafted model transfer pricing rules for extractives, now adopted by Zambia, Ghana, and the DRC. Companies whose margins depended on routing sales through Geneva at deflated prices face compression.

Both the DRC and Tanzanian overhauls came after periods where host governments viewed terms as having been negotiated when their bargaining position was weak or their technical capacity to evaluate offers was limited. This is the part that comparative royalty tables do not capture. Botswana’s Debswana, 50/50 with De Beers since 1969, renegotiated as recently as 2023 to move diamond sorting to Gaborone, has survived five decades because successive governments considered the split proportionate. Côte d’Ivoire, Senegal, Namibia: stable codes through multiple elections, expensive to operate in, predictable. The jurisdictions that will revise most aggressively in the next decade are those where sitting governments view current terms as extractive. That perception lives in local-language parliamentary transcripts and ministerial statements, not in the comparative tax guides that circulate at PDAC.

Zimbabwe’s Statutory Instrument 5 of 2023 banned raw lithium ore exports. The DRC restricted unprocessed cobalt. Zambia signaled similar intent for copper. The direction is uniform and accelerating. Projects designed with in-country processing from inception are getting approval timelines and fiscal terms that are not available to those proposing beneficiation as a future add-on. Deposits within 50 to 100 kilometres of the Lobito, Nacala, and Northern Corridors will see logistics economics shift as construction completes between 2026 and 2030. Most junior explorers along those routes discuss grades and mineralogy in their presentations. The railway under construction nearby goes unmentioned. That optionality is absent from their share prices because they have not told anyone about it.