Mining rare metals in Africa: Who benefits when demand grows

Africa is home to rare metals like tungsten, cobalt, and lithium, which power electric vehicles, green energy, robotics, defense systems, and many more. Cobalt is for battery production; lithium is for rechargeable cells; tungsten, for applications in high temperatures and tools. Having large deposits of some of these inputs is what puts Africa on the map. Who benefits from the rising global demand in Africa: governments, communities, multi-nationals, or middlemen in the supply chain? This is a very simple question, but it has huge consequences for the communities, economy, and the whole Africa at large.

In this article, I will dissect this topic. Let’s find out who actually benefits from the mining of these rare metals in Africa. 

Where do the metals come from?

Let’s first understand where these metals are found and which countries have them in excess.

• Cobalt: The Democratic Republic of Congo (DRC) is a major player in cobalt production and reserves; much of the mined cobalt, both industrial and artisanal, is sourced from here. Therefore, any change in the DRC could be felt through the oscillation of the global supply chain for batteries. The recent government actions toward traceability and export quotas demonstrate how sensitive this market is toward domestic decisions.
• Lithium: As new projects in Zimbabwe, Mali, Namibia, and Madagascar spring to life, Africa is a major player in the production of battery-grade spodumene and hard-rock lithium. In 2025, Africa’s share of global incremental supply growth is among the largest. 
• Tungsten: Tungsten supply is very dependent on China, which itself holds quite a significant part of the global production and reserves, but the presence of African deposits (in Rwanda, Mozambique, and some other countries) is creating an increasing attraction for companies that diversify their sources instead of relying on a single-export country. As such, African deposits have become really important globally. 

The value chain: where the money is (and leaks)

Mining produces a raw commodity. The bulk of value, however, is in post-extraction processing, refining, battery manufacturing, and the final product assembly.

• Upstream (extraction): Artisanal miners, small operators, and large industrial firms extract ore. Artisanal and small-scale mining (ASM) is especially important for cobalt in the DRC and for many tin/tantalum/tungsten mining; it provides livelihoods but often operates informally. 
• Midstream (beneficiation, refining): Here lies a vast increase in value. Converting raw ores into battery-grade salts of cobalt or lithium hydroxide requires capital-intensive plants. Traditionally, African countries exported ores and imported the higher value-added refined products. That trades long-term prosperity for short-term export revenues.
• Downstream (manufacturing & assembly): This is the highest-value segment: cells, battery packs, EV assembly, and advanced materials. Very few African countries currently host significant downstream battery manufacturing.

Who wins? Large multinational miners and traders often capture larger margins, particularly when they have control of the midstream capacity. Host governments collect taxes, royalties, and in some cases, equity stakes, but weak contracts and governance gaps ensure that much value is quickly lost from the country. Local communities may enjoy some wages and small business benefits, but suffer disproportionately from the environmental and social costs.

Artisanal mining

Artisanal miners are very important for cobalt and other critical minerals. For many households living in places like DRC, ASM is an important source of income. However, there are some big policy and reputational challenges that the ASM model raises:

• Irregularity and traceability: Supply chains that include artisanal output are harder to trace, triggering compliance headaches for global buyers seeking “conflict-free” or ESG-compliant cobalt. The DRC has been working on traceable artisanal cobalt programmes to improve conditions and market access, a sign that formalisation is feasible but difficult. 
• Human costs: ASM sites can be dangerous and sometimes include child labor, exploitative middlemen, and armed groups in conflict zones. Among other factors, these realities create investor caution and, in some cases, motivate boycotts or sanctions that can deprive local people of incomes within the areas.
• Price exposure: Artisanal miners typically get paid at the mine gate, which is often a very small fraction of the metal’s downstream value. The middlemen who aggregate, transport, and export ores capture large spreads.

Artisanal mining provides social value through employment; it rarely changes the lives of entire communities economically unless appropriate policy interventions take place: licensing, formal markets, guaranteed price mechanisms, and health and safety programs.

Governments: tax and bargaining power

African governments have few direct benefits: royalties, taxes, and sometimes equity stakes in mining operations. Unfortunately, however, several structural problems limit such benefits when it comes to the net value of the metal:

• Under-recovery: Most of the most valuable properties remain unsecured overseas, because the raw ore rather than the refined product is exported or shipped. Countries with processing facilities retain that value. One policy that can change that calculation is Zimbabwe’s push for lithium beneficiation.
• Contract terms: Poorly negotiated contracts and legal frameworks can give rents to developers. Thus, particularly with new demands for minerals, weak regulators or sudden investment pressure may lead a country into undesirable conditions.
• Policy instability: Sudden declarations of export bans, changes of quotas, or variations in licenses, often to assert control or raise revenue, create price volatility deterring long-term investors while benefiting the middlemen who can arbitrage during the shocks. Recent moves on quota and traceability for cobalt coming out of the DRC underline just how quickly those policy changes affect markets. 

Some good policy instruments to improve the country’s benefit would include a clear mining code, ring-funding revenues for development, local content laws (for jobs and procurement), and incentives for downstream processing.

Large beneficiaries: Agents and foreign investors

Large mining firms, foreign refiners, and state-backed, often Chinese, European, or US enterprises usually comprise the groups with the most profits. They carry capital, logistics, and markets, but also power in bargaining. 

This vertical integration for buyers (e.g., battery companies securing upstream supply) enables these companies to secure raw materials while collecting larger portions of the value along the chain.

China’s role in processing and refining is strong across numerous metals, especially significant for tungsten and lithium, where Chinese companies possess large amounts of Chinese-invested refining capacity. That has policy implications in terms of supply diversification and geopolitical leverage. 

The local community will benefit more if these large corporations and investors commit to carrying out local hiring and procurement, transparency of revenue, and community investments. 

Who pays for the environmental and social costs?

Digging up the earth to make metals and minerals leads to jobs. At the same time, mining brings pollution, water stress, land loss, and social disruption. Recent research and reports have highlighted the tragic realities of the risks: tailings pollution, depletion of groundwater, deforestation, and dislocation. The weak regulation and quick project approvals would further amplify those effects. 

Communities surrounding working mines typically get the least from the mining and the most harm: noise, exposure to dust, health issues, and loss of farmland. The result is that, if governments do not enforce environmental protection and companies do not contribute money for remediation, the social license to operate disappears, and with it the long-term investments. 

How to rebalance the gains: practicable policy moves

If African countries want to benefit from the rising demand for these rare metals, then quick action will need to be taken. Overseas countries have long exploited Africa and reaped the most benefits from the mining of these rare metals, while leaving the communities to deal with the negative consequences of mining. To turn this situation around, practical steps would need to be taken: 

• Local beneficiation and industrial policy: Africa should invest in midstream processing (smelting, refining) and clear incentives for battery manufacturing. Already, countries such as Zimbabwe are pursuing beneficiation policies on lithium.
• Formalise and support ASM: Create licensed ASM zones, offer legal marketplaces, guarantee minimum prices, and finance safety and traceability programmes so artisanal output can enter global, ESG-compliant supply chains. International support and private-sector offtake deals can accelerate this. 
• Environmental safeguards and funds for remediation: There should be compulsory environmental bonds, and the community must be involved in public consultation to avoid becoming a long-term liability. 
• Local content and jobs: Require project users to have local staff, form contracts with local procurement sources, and finance technical training for communities to take up skilled roles. 
• Regional cooperation and standards for traceability: Most supply chains are transnational; thus, we need regional adoption of the rules and systems for traceability and conflict-mineral safeguards to prevent illegal flow and raise incentives for legitimised trade. 

No single country can dictate who benefits. Mostly, global buyers, geopolitical competition (which includes the case of Chinese refiners versus Western firms), commodity cycles, and technology shifts, which are illustrated by new battery chemistry structures that diminish the demand intensity of cobalt, will influence demand and pricing. Resilience and not dependency are needed by countries; for example, diversification of partners, building processing capacity, and ensuring standards.

Conclusion

The soaring demand for tungsten, cobalt, and lithium is a real chance for these African nations. Yet, the default scenario of raw exports feeding foreign value chains and leaving the communities to absorb the ill effects would have to be avoided. With sound industrial policy and strong governance, the formalization of artisanal miners and investment in midstream processing, the governments of Africa can channel greater value into jobs, infrastructure, and sustainable development.