Southern Africa
Using Equity and Offtake Agreements to Secure Critical Mineral Supply
![Leveraging Policy Reforms to Unlock Critical Mineral ProductionContextPredictable taxation, streamlined licensing, and transparent regulation are critical for attracting investment in the mining sector. Across Southern Africa, countries with abundant copper, cobalt, and other critical mineral reserves are reforming their policy frameworks to meet rising global demand for these resources, which are essential for electric vehicles, renewable energy systems, and other low-carbon technologies. Common challenges include volatile tax regimes, complex licensing systems, low levels of geological mapping, and limited downstream value addition.One example is Zambia, a leading global producer of copper and cobalt, which accounted for ~3% of global copper output in 2023.[i] The country has recently introduced a series of reforms aimed at revitalizing its mining sector, increasing production, and attracting investment.In recent years, the government introduced a series of reforms, aimed at revitalizing the mining sector and boosting the production of critical minerals. The decade old legislation, the Mines and Minerals Development Act, has been replaced with a new one which is focused on streamlining regulation under a centralized body and enhancing local participation.[ii]ChallengeDespite having large reserves of mineral resources, particularly critical minerals, Zambia’s mining sector faced several challenges:Uncertain policy regime: Zambia was struggling with a high tax regime, complex set of laws and regulatory hurdles in the mining sector which prevented investments. Mining tax laws were volatile and changed frequently in response to movements in the price of copper. Royalty rates have witnessed abrupt increases in the past, there has been double taxation on mineral royalties and a 5% import duty was levied on copper concentrates.[iii]Macroeconomic conditions: Zambia was the first country to default on its external debt after the COVID-19 pandemic, after years of taking on debt (Debt-GDP ratio being ~115%) and increasing loans to unsustainable levels. The key reason for debt was a lack of diversification in the economy and heavy reliance on copper mining. Volatility in the price of copper led to fiscal and trade imbalances.[iv]Underinvestment in exploration & mapping: Almost 45% of Zambia’s land has not been geologically mapped and 55% of it had been mapped almost 25 years ago. Macroeconomic woes have further exacerbated the underinvestment in exploration by private companies. The mining potential is severely untapped and to further develop the sector, mining companies require support in exploration to discover new deposits.[v]Low value addition: Reliance on exports of unprocessed minerals has led to limited value adding downstream processing activities. This has also led to a resource nationalism approach, where the import duty on copper concentrates was levied.[vi]ApproachTo address these challenges, the government of Zambia has enacted a series of policy reforms:National Mineral Resources Development Policy 2022: Addresses policy challenges by promoting transparency in licensing, stabilizing taxation, incentivizing exploration through Public Private Partnerships, formalizing artisanal mining, fostering local ownership and enhancing mineral value addition[vii]Zambia’s Budget of 2023: Introduced tax reforms such as a reduction from 10% to 7.5% of the property transfer tax on mineral rights, allowing for deductions of mineral royalty tax for mining companies, and introducing presumptive taxation for Artisanal and Small-scale mining as a percentage of revenue[viii]Minerals Regulation Commission Act 2024: Centralizes regulatory functions under the Minerals Regulation Commission, streamlines licensing with a one-stop system, and introduces stricter compliance measures to prevent speculative license holding. It also expands mining rights for locals and introduces a Property Transfer Tax for mining rights, stabilizing government revenues[ix]ConditionsThere are several factors that enabled Zambia to undertake the reforms to uplift the mining sector Increasing importance of critical minerals: Copper exports, amounting to ~70% of the country's total exports in 2022, have always been the key economic driver. The government setting up an ambitious target of increasing copper output to 3million tons by 2032, from 700,000 tons currently, increased the need for fast paced reforms[x]Political will: The election of a new President in 2021 and the new government’s focus on the mining sector created an opportunity to enact major legislative reformsStrategic partnerships: Investments from mining companies such as Rio Tinto, First Quantum, and International Resource Holdings, alongside the US led effort on infrastructure projects such as the Lobito Corridor, necessitated mining sector reforms[xi]Observed ImpactCountries that implement comprehensive reforms often see early improvements in investment climate, exploration activity, and production.In Zambia, initial results include:Production growth potential: Government projections indicate copper output could rise to 1 million tonnes by 2026 through expanded mining investment.[xii]Improved licensing processes: Integration of ICT and enhanced stakeholder collaboration has increased transparency, efficiency, and accountability.[xiii]Stable taxation environment: The reformed property transfer tax and royalty deductions have improved investor confidence while increasing the government’s revenue share.[xiv]Strengthened partnerships: Mercuria Energy Group has partnered with Zambia on a metals trading venture to secure access to key resources.[xv]What’s Next for the Southern African RegionRecent reforms in the region highlight lessons for other mineral-rich countries to align their policies with the increasing demand for critical minerals and unlocking their mining potential.Stabilizing tax regimes: Stable and predictable taxes are necessary for attracting foreign investment in the mining sector. Any uncertainty makes it difficult for investors and impedes the development of critical mineral value chains.Local processing: Legislative changes that support local players and formalize artisanal mining can allow the countries to capture more value locally, without the need for explicit export bans.Global partnerships: The right set of policy reforms can pave the way for partnerships with mining companies, governments from other countries as well as Development Finance Institutions to support the mining sector.[i]https://www.csis.org/analysis/recommendations-building-zambias-copper-industry[ii]https://www.dentons.com/en/insights/articles/2025/march/18/mining-law-overhaul#:~:text=Zambia's%20mining%20sector%20has%20undergone,introducing%20a%20Mining%20Appeals%20Tribunal[iii]https://www.csis.org/analysis/recommendations-building-zambias-copper-industry [iv] https://www.csis.org/analysis/recommendations-building-zambias-copper-industry[v] https://www.afriwise.com/blog/zambias-mining-sector---anticipated-regulatory-and-institutional-reforms-following-the-launch-of-new-mining-policy[vi] https://www.csis.org/analysis/recommendations-building-zambias-copper-industry[vii] https://www.afriwise.com/blog/zambias-mining-sector---anticipated-regulatory-and-institutional-reforms-following-the-launch-of-new-mining-policy[viii] https://www.csis.org/analysis/recommendations-building-zambias-copper-industry[ix] https://www.dentons.com/en/insights/articles/2025/march/18/mining-law-overhaul#:~:text=Zambia's%20mining%20sector%20has%20undergone,introducing%20a%20Mining%20Appeals%20Tribunal[x] https://www.csis.org/analysis/recommendations-building-zambias-copper-industry [xi] https://www.csis.org/analysis/recommendations-building-zambias-copper-industry[xii] https://finance.yahoo.com/news/zambias-copper-output-may-rise-103745020.html?guce_referrer=aHR0cHM6Ly93d3cuYmluZy5jb20v&guce_referrer_sig=AQAAAJg5Vp7LRFGHDnbZ2JzHpbECpbCJPK7uzw1AQxZBgON2k9ME8oGmMQkbmkJa4nHHYIGSPXZhaGKSonCXQ5yPSYKdEz47qj0tfmT3oZGHFmoliZSNGdg0eHjSwPqw6Y7XDpBRRmCIuojXK09ACpZVhe4Iw1fw6zF3u8dnCKCH-9li&guccounter=2[xiii] https://www.afriwise.com/blog/zambias-mining-sector---anticipated-regulatory-and-institutional-reforms-following-the-launch-of-new-mining-policy[xiv] https://www.dentons.com/en/insights/articles/2025/march/18/mining-law-overhaul#:~:text=Zambia's%20mining%20sector%20has%20undergone,introducing%20a%20Mining%20Appeals%20Tribunal[xv] https://www.mining.com/web/mercuria-partners-with-zambia-on-metals-trading-venture/](https://fws.weforum.org/images/casestudies/aJYTG0000000pnJ4AQ/standard)
Leveraging Policy Reforms
Building Capacity for Mining Innovation Through Public–Private Partnerships
![Strategic Railway Investments to Facilitate Trade in Critical MineralsContextSome countries with vast reserves of critical minerals (cobalt, copper, and nickel, etc.) face difficulties in transporting them to global markets due to infrastructure challenges. As part of the SMET analysis, this case is identified as an example of strategic cross-border infrastructure investment aimed at unlocking critical mineral supply chains and fostering regional integration.One example is the Lobito Atlantic Railway, a strategic transportation route that connects the Atlantic coast of Angola to the Democratic Republic of Congo (DRC). A concession has been granted to a private consortium to upgrade and rehabilitate the existing railway line and associated infrastructure, including connections into the DRC’s copperbelt mining region.A second, separate phase of the project envisages construction of a new 800 km railway line to connect the Lobito Atlantic Railway to Zambia (the Zambia–Lobito Rail Project). This greenfield project is being assessed through a public–private partnership involving the governments of Angola, DRC, and Zambia, with support from international development partners. These investments are expected to play an important role in advancing regional economic integration and development.The Lobito Atlantic Railway (from Lobito to the DRC) is operated by a European group consisting of Trafigura, Mota-Engil, and Vecturis.[i] The Development Bank of Southern Africa (DBSA) has played a pivotal role in co-arranging funds for this project, approving US$200 million in funding alongside the US International Development Finance Corporation (DFC).[ii]ChallengeThe transportation infrastructure in Southern Africa, particularly in the DRC and Zambia, suffers from the following challenges which the Lobito Corridor seeks to address[iii] [iv]:Ageing and inefficient railway networks: Much of the existing infrastructure has seen limited modernization over the years, with periods of conflict further contributing to deterioration. High costs of transportation: Lack of investment in upgrading railway networks has led to an inefficient and fragmented transportation system, which leads to higher costs of transportation. Lack of regional integration: Weak cross-border infrastructure and underdeveloped regulatory frameworks limit trade. Landlocked mines: Many mineral deposits are in landlocked countries, requiring longer routes via Durban and Dar es Salaam, creating delays and logistical difficulties.[v]ApproachThe Lobito Atlantic Railway project is being advanced through various approaches [vi]: Public–private partnership model: Implemented under a concession structure that combines private sector operational capacity with government oversightPhased development: Starting with rehabilitation and operation of existing railway infrastructure, with future plans to extend the corridor through new greenfield linesBlended financing: Mobilizing a mix of development finance and private investment to share risk and attract long-term capitalCross-border collaboration: Jointly developed by multiple governments with support from international partners to ensure coordination across bordersSustainability focus: Designed to align with international standards on transparency, ethical sourcing, and sustainable value chainsConditionsThe Lobito Atlantic Railway helps enhance Southern Africa’s trade efficiency, regional integration, and mineral exports: Policy harmonization: The Lobito Corridor Transit Transport Facilitation Agency harmonizes customs, trade policies, and infrastructure strategies across Angola, Zambia, and the DRC.[vii]Infrastructure development: Rehabilitation of railway networks, new freight terminals, modern border infrastructure, and harmonized regulations.[viii]International cooperation: Engagement of global partners such as the US, EU, AfDB, and AFC to integrate Southern Africa into global supply chains and mobilize investment.[ix]Observed ImpactThe development and use of the Lobito Corridor, backed by MoUs signed between international agencies and regional governments, has created conditions to integrate DRC and Zambia into global critical mineral value chains: Transportation efficiency: Provides open access logistics at more competitive rates compared to alternatives.Economic development: Facilitates downstream processing, supports local industries, and generates employment. Energy transition: By ensuring faster, cheaper access to cobalt and copper, it contributes to lowering renewable technology costs.This case shows how strategic infrastructure development can simultaneously advance regional development and global energy transition goals.What’s Next for the Southern African RegionThe Lobito Corridor projects can serve as a blueprint for other SADC countries:Infrastructure investments: Supporting infrastructure must match mineral endowments to unlock full potential.Regional cooperation: Harmonizing rules and policies is key for seamless cross-border trade.Engaging international partners: Development banks and multilateral institutions bring funding, risk mitigation, and best practices.Experience from this case demonstrates that infrastructure, cooperation, and global partnerships together can unlock critical mineral value chains at scale.[i] https://www.lobitocorridor.org/history-background[ii] https://afripoli.org/a-game-changer-in-flux-recent-developments-and-risks-in-the-lobito-corridor[iii] https://www.undp.org/sites/g/files/zskgke326/files/2024-10/lobito-corridor-policy-brief.up.pdf[iv] https://www.oecd.org/content/dam/oecd/en/events/2025/04/oecd-emerging-markets-forum/Panel%202_OECD%20EMF%20Background%20Note%20-%20The%20Lobito%20Corridor.pdf[v] https://www.lobitocorridor.org/history-background[vi] https://afripoli.org/a-game-changer-in-flux-recent-developments-and-risks-in-the-lobito-corridor[vii] https://www.undp.org/sites/g/files/zskgke326/files/2024-10/lobito-corridor-policy-brief.up_.pdf[viii] https://www.oecd.org/content/dam/oecd/en/events/2025/04/oecd-emerging-markets-forum/Panel%202_OECD%20EMF%20Background%20Note%20-%20The%20Lobito%20Corridor.pdf[ix] https://afripoli.org/a-game-changer-in-flux-recent-developments-and-risks-in-the-lobito-corridor](https://fws.weforum.org/images/casestudies/aJYTG0000000pqX4AQ/standard)
Building Cross-Border Infrastructure to Unlock Critical Mineral Supply Chains
![Green Industrialization Enabled by Renewable EnergyContextAcross the globe, decarbonizing mineral processing is emerging as a critical priority for achieving net-zero goals. Traditional production of metals such as iron relies heavily on coal or natural gas, resulting in significant carbon emissions. In many mineral-rich economies, this dependency not only increases environmental impact but also limits competitiveness as global trade increasingly restricts carbon-intensive products.For countries in Southern Africa, abundant renewable energy resources present an opportunity to pioneer green industrialization, using solar, wind, and other clean power sources to drive domestic processing of raw materials. This can support local value addition, create skilled jobs, and improve export competitiveness.One example that was analyzed as part of the SMET initiative is the Oshivela plant in Namibia, Africa’s first industrial-scale green iron facility powered entirely by renewable energy.The plant was launched in April 2025 and has been facilitated by a consortium comprising German and Namibian renewable energy and engineering companies, which helped build a plant which is powered by solar energy using the largest electrolyzer in Southern Africa. This project could develop with the help of the framework of the EU-Namibia strategic partnership on Green Hydrogen.[i] It has an initial capacity of 15,000 tons per year and is planning to scale up to produce 2 million tons per year by 2030. It serves as a leading example of green industrialization.[ii]ChallengeTraditionally, the mining industry has faced challenges in decarbonizing:High carbon emissions: Use of fossil fuel sources such as coal to power the mining sector has led to high carbon emissions globallyEnergy dependency: The mining sector’s reliance on fossil fuels added up to higher operational costs and caused significant environmental damageStructural issues in the Namibian economy: Dependency on raw material exports without in-country value addition, high youth unemployment and restrictions faced by carbon intensive products in global tradeApproachThe Oshivela plant demonstrates how renewable power and green hydrogen can be integrated into mineral processing:Integration of renewable energy: Off-grid plant powered by a 25 MW solar photovoltaic system and a 13.4 MW battery storage system, ensuring zero-emissions production[iii]Green Hydrogen: The largest hydrolyzer in Southern Africa, with a power of 12MW, developed to produce green hydrogen for use in the reduction process, as an alternative to coal or natural gas[iv]Scalability of the technology: Modular technology allows for rapid capacity expansion, with plans to scale production to 2 million tons of iron by 2030[v]ConditionsThere was a combination of factors which worked in Namibia’s favor and allowed it to produce green iron at the Oshivela Plant:Renewable resources: Namibia already possessed abundant solar and wind energy resources which helped in building a foundation for renewable energy generation for the projectFunding: Grants and concessional funding from European partners reduced project risk in the pilot and scale-up phases. [vi]Government support: National policies prioritizing sustainable industrialization and green hydrogen development provided a clear framework for investors.Observed ImpactThe use of renewable energy at Hylron’s Oshivela Plant to produce green hydrogen is expected to have a lasting impact on decarbonizing mining operations:Emissions reduction: By using renewable energy, the plan is expected to reduce carbon emissions by 27000 tons in its initial phase which can be scaled up to a maximum potential of 1.8 million tons per year[vii]Leadership in decarbonization: If the plant is successful in producing iron up to the target levels and reducing carbon emissions at the same time, it can position Namibia as a global leader in green industrializationEconomic growth: By adopting this model of industrial development, Namibia can also move up the value chain in critical minerals processing, enhance its industrial base and improve its performance in global tradeOfftake agreement: HyIron secured an agreement with Benteler, a German metals processing company, for an offtake of 200,000 tons per year of hydrogen-reduced iron[viii]What’s Next for the Southern African RegionGreen industrialization models like Oshivela’s offer replicable lessons for other mineral-rich countries:Renewable energy installation: Building capacity for solar, hydro, or wind energy could play a key role in enabling future green industrial activity.Scalable technologies: Technologies like Hylron, which are modular and adaptable, may offer replicable models that other countries could consider based on their mineral profilesCollaboration with international partners: Namibia’s partnership with the EU, including technical and financial support from Germany, has been an important enabler that other countries might look to emulate[i] https://international-partnerships.ec.europa.eu/news-and-events/news/global-gateway-namibia-becomes-pioneer-africas-green-transition-2025-04-11_en[ii] https://english.news.cn/africa/20250412/c25254f22c3947a199213923f94208e4/c.html[iii] https://www.energize.co.za/article/namibia-opens-renewables-powered-green-iron-plant[iv] https://english.news.cn/africa/20250412/c25254f22c3947a199213923f94208e4/c.html[v] https://english.news.cn/africa/20250412/c25254f22c3947a199213923f94208e4/c.html[vi] https://international-partnerships.ec.europa.eu/news-and-events/news/global-gateway-namibia-becomes-pioneer-africas-green-transition-2025-04-11_en[vii] https://hyiron.com/oshivela/[viii] https://fuelcellsworks.com/2025/03/20/electrolyzer/milestone-hyiron-oshivela-produces-first-green-hydrogen-in-southern-africa-using-chinese-electrolysers](https://fws.weforum.org/images/casestudies/aJYTG0000000qeX4AQ/standard)
Green Industrialization Enabled by Renewable Energy
![Industrial Clusters as Catalysts for Mineral BeneficiationContextIndustrial clusters—geographically concentrated zones where multiple industries share infrastructure, services, and markets—are a proven approach to boosting value addition, attracting investment, and diversifying economies. In the minerals sector, clusters that integrate beneficiation facilities with co-located industries can help countries capture more value from their resources, improve export competitiveness, and create skilled employment.Across Southern Africa, the development of such clusters has been slow due to infrastructure gaps, complex regulations, and underinvestment in downstream processing. Where implemented effectively, industrial clusters can provide world-class infrastructure, competitive input costs, simplified administration, and proximity to transport hubs such as ports and rail, enabling integrated value chains from extraction to finished products.One example that was analyzed as part of the SMET initiative is the Richards Bay Industrial Development Zone (IDZ) in South Africa’s KwaZulu-Natal province, a designated Special Economic Zone that hosts mineral beneficiation facilities alongside other industries.ChallengeCommon barriers to industrial cluster development in the region include:Infrastructure deficits: Lack of adequate transportation, energy and water infrastructure has affected the development of industrial projects and efficient processing of mineralsRegulatory hurdles: Complex regulations and administrative clearances create difficulties in running downstream processing businessesUnderinvestment: Limited access to capital for developing downstream beneficiation facilities and industrial operations has stunted industrial growthApproachRichards Bay IDZ has emerged as an industrial cluster that has a port in its vicinity and provides incentives and shared infrastructure for multiple industries[iv]:Tax incentives: Tax incentives offered to downstream facilities help in reducing the cost of operations and making the zones investor-friendlyShared infrastructure: Transportation, utilities and waste management facilities, all provided in a consolidated manner to support efficient industrial operationsSimplified administrative processes: Streamlined regulatory regime and establishment of Customs Controlled Areas (CCAs)Cluster development: Clusters smaller, downstream manufacturing businesses around existing industries to promote synergiesConditionsExperience from the Richards Bay IDZ illustrates the importance of: [v] [vi] [vii]Government support: The Department of Trade, Industry and Competition in South Africa provided funding and the KwaZulu-Natal Department of Economic Development, Tourism and Environmental Affairs (DEDTEAM) provided policy supportLocation: Proximity to the deep-water port of Richards Bay, which is one of the largest bulk cargo ports in AfricaPolicy framework: Aligning the industrial cluster with national/provincial industrial policies created a conducive environment for industrial developmentPartnerships: Involvement of private sector players and development finance institutions facilitated mobilization of investment and technical expertiseObserved ImpactThe Richards Bay IDZ has demonstrated how an industrial cluster can drive mineral beneficiation and economic diversification: [viii] [ix]Investment attraction: Investments attracted due to the presence of Richards Bay IDZ has helped in the establishment of projects such as the Nyanza Light Metals plant, which is a $4.5 billion project financed by Africa Finance Corporation, the African Export-Import Bank, the Industrial Development Corporation and the Department of Trade, Industry and CompetitionEmployment generation: Over 3000 Jobs are expected to be created through the KwaZulu Natal Titanium Beneficiation ComplexExport competitiveness: Beneficiation of raw materials facilitated by Richards Bay IDZ through the KwaZulu Natal Titanium Beneficiation Complex will produce 80,000 tonnes of titanium dioxide pigment per annum, of which 85% will be exported and 15% sold to the local market.Economic diversification: The development of Richards Bay IDZ helped in diversifying the local economy beyond raw mineral exports[x]What’s Next for the Southern African RegionIndustrial clusters can revitalize the industrial sector of Southern African nations:Strategic locations: Finding major industries and enabling transportation infrastructure such as ports and railway lines can help in creating synergies and forming industrial clustersPolicy support: Getting governments on board to expedite regulatory approvals and ensure quick turnaround timesInfrastructure development: Building shared infrastructure for transportation, utilities and waste management facilities can increase attractiveness of industries to locate within the clusters[i] https://www.kznedtea.gov.za/programmes/public-entities/richards-bay-industrial-development-zone/index.htm[ii] https://www.rbidz.co.za/index.php/sectors/metals-benefication[iii] https://www.south32.net/what-we-do/our-locations/southern-africa/hillside-aluminium[iv] https://www.econstor.eu/bitstream/10419/161577/1/878844732.pdf[v] https://www.sfu.ca/~pvhall/pdfs/pvhall_criticalplanning_2000.pdf[vi] https://www.kznedtea.gov.za/programmes/public-entities/richards-bay-industrial-development-zone/index.htm[vii] https://www.miningweekly.com/article/advantages-of-investing-in-rbidz-outlined-at-mining-indaba-2024-02-06[viii] https://www.miningweekly.com/article/860m-ilmenite-beneficiation-project-enters-bulk-earthworks-phase-at-richards-bay-idz-2024-10-25[ix] https://african-miningweek.com/news/8-critical-mineral-projects-watch-south-africa[x] https://mg.co.za/article/2015-09-04-00-geared-for-growth/](https://fws.weforum.org/images/casestudies/aJYTG0000000qg94AA/standard)
Industrial Clusters as Catalysts for Mineral Beneficiation
![Innovative Tailings Management ContextTailings management is one of the most pressing environmental and operational challenges in mining. Traditional wet tailings facilities require large volumes of water and can pose significant stability and safety risks, particularly in water-scarce regions. Failures can have severe social, environmental, and economic consequences, leading to stricter global standards such as the Global Industry Standard on Tailings Management (GISTM).With growing water scarcity and heightened ESG requirements, the industry is seeking cost-effective technologies that can both conserve water and improve tailings stability.One example is Hydraulic Dewatered Stacking (HDS), a patented technology first piloted in Chile and now being trialed in Southern Africa.ChallengeMining operations worldwide face multiple challenges in tailings management, especially in water-stressed environments: Tailings stability: Traditional storage facilities created for wet tailings can cause major risks to the communities and the environment, and can potentially lead to failures and mudslidesImpact on the environment: Tailings dam spillage has an adverse impact on the environment as they cause contamination of the soil, water bodies and the entire ecosystem with hazardous waste such as heavy metals and chemicals. Ameliorating these effects requires costly remediation efforts[iv]Regulatory compliance: Global Industry Standards on Tailings Management (GISTM) are industry standards with stringent compliance requirements and ensuring that mines adhere to them requires finding ways to keep tailings facilities stable and safe in the long-term[v]Economic Viability: Mining projects are generally capital intensive, but in absence of financing, it is important to discover ways to innovate cost-effective solutions to ensure economic viability, particularly for managing tailingsApproachAnglo American developed Hydraulic Dewatered Stacking (HDS), a desaturated tailings storage method that combines coarse particle recovery (CPR) with innovative deposition techniques to improve both water recovery and facility safety. [vi] The technology's features include: Innovative technology: Use of fines-free sand generated by coarse particle recovery to create a drainage network within the tailings mass, allowing for rapid dewatering and consolidationWater recovery: The technology works in a way that allows water entrained in the tailings to be recycled and this ends up reducing the demand for fresh water. This has a positive effect on regions suffering from water scarcityEnhanced stability: HDS helps in improving the safety and stability of tailings storage facilities by dewatering the tailings and eliminating the surface pond. Even in the case of a failure of the facility, the lower interstitial water content reduces the potential for mudslidesCost-effective implementation: By offering solutions without a need for high capital expenditure, it is a more economical way to tackle the problem of wet tailings when compared to other thickened and filtered tailings technologiesProgressive closure: Cells-based approach to tailings deposition allows for progressive closure and reclamation over the life of the mines. The need for long-term monitoring is reduced by the free-draining nature of HDS tailings that minimize the risk of re-saturation and long-term seepage ConditionsThe development and implementation of HDS benefited from:[vii] [viii] Technological innovation: Successful implementation of CPR technology, which helped in providing fine-free sand needed for the drainage networkSuccessful collaborations: Joint development with engineering firm WSP.Regulatory support: Facilitation from Chile’s Ministry of Mining and Sernageomin (National Geology and Mining Service)Research and development: Laboratory trials conducted extensively, concept studies and field trials conducted, helped in refining the HDS technology, ensuring its feasibility Supporting infrastructure: Construction of a bespoke HDS tailings facility and extensive instrumentation for data collection and monitoring, helped in providing the necessary infrastructure and validation Observed ImpactHDS has been successful in achieving a wide-ranging impact, particularly in achieving water saving in a water-constrained environment: Water conservation: High levels of water recovery, i.e. >80% of tailings water being recycled back to the mine, has been demonstrated, which reduces the demand for fresh water[ix]Potential transferability: Successful testing in Chile allowed for the technology to be piloted at the Mogalakwena Platinum Mine in South Africa, which will be the first brownfield application of HDS, which would be scaled up to the world’s first large-scale HDS facility[x]Improved safety: Reduced potential for failure and mudslides through desaturation.Economic efficiency: Lower capital and operating costs compared to other advanced tailings technologies.What’s Next for the Southern African RegionThis case highlights how Hydraulic Dewatered Stacking could be applied more broadly across Southern Africa to strengthen responsible mining practices: Tailings management: Use of HDS could improve water conservation and the safety and stability of tailings storage facilitiesCollaborative development: Forging partnerships among mining companies, engineering firms and government agencies is key to promote innovative technologiesWater sustainability: To improve the environmental footprint of mine operations and comply with global ESG standards, it is necessary to prioritize water recovery and recycling, that also enhances water sustainability[i] https://www.angloamerican.com/our-stories/innovation-and-technology/progress-on-hydraulic-dewatered-stacking-el-soldado-chile[ii] https://www.angloamerican.com/our-stories/environment/tailings-of-the-future-hydraulic-dewatered-stacking-hds-completes-initial-testing-in-chile#:~:text=Sustainable%20Mining%20Plan-,Tailings%20of%20the%20future%3A%20Hydraulic%20Dewatered%20Stacking%20(HDS),completes%20initial%20testing%20in%20Chile&text=After%20years%20of%20development%2C%20testing,Soldado%20copper%20mine%20in%20Chile[iii] https://www.mining-technology.com/features/dammed-if-you-dont-how-tailings-management-is-everyones-concern/?cf-view[iv] https://www.encardio.com/blog/environmental-impacts-of-tailings-dams#:~:text=This%20contamination%20adversely%20affects%20aquatic,levels%2C%20and%20harming%20aquatic%20organisms.&text=The%20disposal%20of%20tailings%20results,barren%20areas%20devoid%20of%20vegetation.[v] https://www.e-mj.com/features/turning-the-tide-on-tailings-creating-opportunities-rather-than-risks/[vi] https://im-mining.com/2023/04/26/anglo-american-proves-hydraulic-dewatered-stacking-value-at-el-soldado/[vii] https://www.angloamerican.com/our-stories/innovation-and-technology/progress-on-hydraulic-dewatered-stacking-el-soldado-chile[viii] https://im-mining.com/2023/04/26/anglo-american-proves-hydraulic-dewatered-stacking-value-at-el-soldado/[ix] https://www.angloamerican.com/our-stories/innovation-and-technology/progress-on-hydraulic-dewatered-stacking-el-soldado-chile[x] https://www.valterraplatinum.com/~/media/Files/A/Anglo-American-Group/Platinum/sustainability/case-studies/hydraulic-dewatered-mogalakwena.pdfOTHER SOURCEShttps://www.wsp.com/en-ae/projects/el-soldado-and-hds https://www.wsp.com/en-ae/insights/innovation-in-tailings-dewatering https://im-mining.com/2022/12/08/anglo-american-ushering-in-a-new-era-of-tailings-disposal-with-hydraulic-dewatered-stacking-tech/ https://www.insightterra.com/case-studies/anglo-american](https://fws.weforum.org/images/casestudies/aJYTG0000000r2j4AA/standard)
Innovative Tailings Management
![Mobilizing Local Financial Institutions to Fund Large-Scale Mining ProjectsContextFinancing large-scale mining projects is often complex and capital-intensive, with many initiatives in Africa facing difficulties securing funds from international lenders due to perceived risks. Upstream mining projects, in particular, require substantial upfront investment before revenues are generated.In many countries, local financial institutions have historically played a limited role in such deals, citing constraints in available capital, transaction structuring capacity, and risk appetite. However, when local banks can lead financing arrangements, they are well placed to align transactions with national development priorities, embed local content requirements, and ensure compliance with international environmental, social, and governance (ESG) standards.One example of this approach is the syndicated loan arranged by Rawbank in the Democratic Republic of Congo (DRC) to support the expansion of the Kamoa-Kakula copper project. The deal included provisions such as repatriation of 60% of revenues to the DRC.[i] The case illustrates how local banks can drive development impact in high-stakes mining projects.ChallengeThe mining industry finds it difficult to arrange financing for projects, particularly those in the upstream stage, due to the inherent risks involved[ii] [iii]:High capital requirements: Projects of a large scale, such as the Kamoa-Kakula copper project require significant upfront capital for expansion and local financial institutions in Southern African countries usually do not have the required capital to enable thisComplex regulations: Being a highly regulated industry, arranging financing requires managing legal and operational complexity, which deters many financiers, particularly those from outside the regionRisk perception: Factors such as political instability, violent conflicts, infrastructural challenges, regulatory uncertainties and price volatility of critical minerals, all increase the inherent risks in such projectsLack of precedent: There have been very few examples of syndicated loans led by local banks and this required innovative structuring and collaboration between diverse stakeholdersApproachRawbank, the largest commercial bank in DRC, emerged as a key player in financing the critical mineral sector, especially through its role in arranging a $400million syndicated loan to support expansion of the Kamoa-Kakula copper project:Leadership in the syndicated loan: Rawbank pioneered the structuring of the syndicated loan, bringing other banks such as the FirstBank DRC and Absa Bank on board to mobilize blended capital[iv]ESG considerations: Rawbank ensured that the financing aligned with international standards on ESG such as those by the International Finance Corporation (IFC), International Council on Mining and Metals (ICMM) and Global Industry Standard on Tailings Management (GISTM) ensuring sustainable mining practices and compliance with DRC’s mining lawsRenewable source of energy: By arranging 150 MW of clean hydroelectric power from Mwadingusha and Inga II, the project helped in reducing its carbon emissionsLocalization of content: Rawbank took the initiative in bringing local suppliers such as Pacific Logistics into the project, which also ensured compliance with Article 108 of DRC’s mining codeInnovative financing tools: Use of platforms such as Rawbank online and SIOP for automating transactions and providing tailored solutions for working capital, equipment finance and trade finance[v]ConditionsSeveral factors supported the success of this financing arrangement:Supportive regulatory framework: DRC’s legislations, particularly the 2018 Mining code, enabled a structured legal environment, which mandated local financial inclusionStrategic partnerships: By including Absa Bank and FirstBank DRC, Rawbank was able to mobilize sufficient capital for the projectInstitutional capacity: Rawbank’s established market presence and project finance expertise enhanced credibility with international investors.Observed ImpactThe transaction is having tangible impacts on the DRC’s mining and energy sectors:Copper production: The funds raised by Rawbank for the expansion of the Kamoa-Kakula copper project would enable it to become the 3rd largest copper mine in the world, with an annual production capacity of 600,000 tons[vi] (they produced 437,000 tons in 2024[vii]), which would be ~20% of the total 3.3 million tons of copper produced in the DRC[viii]Renewable energy upgrade: The project installed a capacity of 178 MW of hydroelectric power to the national grid, helping with the energy transition[ix]Flagship case: This deal helps set a precedent for other financial institutions in Africa, as other local banks can also lead complex syndicated structures, ensuring greater availability of funds to the mining sectorWhat’s Next for the Southern African RegionThis example offers lessons for countries seeking to expand mining investment through domestic financial sector participation:Empower local banks: Strengthen capacity, access to capital, and risk management tools so they can co-lead or lead large-scale mining financingIntegrate ESG in financing: Ensure compliance with international standards is embedded in financing arrangements to attract global partners and meet sustainability goalsLeverage blended finance: Combine domestic and international capital to de-risk projects, mobilize larger funding packages, and attract new investment into the mining value chain[i] https://globaltaxnews.ey.com/news/2018-5549-democratic-republic-of-congo-reforms-mining-code[ii] https://african.business/2025/05/politics/african-led-diplomacy-struggles-to-resolve-drc-war[iii] https://african.business/2025/02/resources/miners-struggle-to-raise-capital-for-african-critical-minerals-projects[iv] https://www.africanlawbusiness.com/news/20215-kamoa-copper-secures-third-phase-expansion-funding/[v] https://www.kapitalafrik.com/2024/02/05/rawbank-announces-a-200-million-injection-into-the-congolese-mining-sector-via-an-international-fund-raising-operation/[vi] https://rawbank.com/la-banque/wp-content/uploads/sites/2/2024/06/Rawbank_Annual-Report-2023.pdf[vii] https://bankable.africa/en/mining/0901-673-dr-congo-biggest-copper-mine-produced-437-061-t-in-2024[viii] https://energycapitalpower.com/new-exploration-expansion-projects-drive-africas-copper-market-growth/[ix] https://rawbank.com/la-banque/wp-content/uploads/sites/2/2024/06/Rawbank_Annual-Report-2023.pdfOTHER SOURCESRawbank presentation, Workshop 2, WEF SMET](https://fws.weforum.org/images/casestudies/aJYTG0000000r2k4AA/standard)
Mobilizing Local Financial Institutions to Fund Large-Scale Mining Projects
![Frameworks to Secure Sustainable Critical Mineral Supply ChainsContextSecuring a stable, diversified, and sustainable supply of critical minerals is essential to support the green and digital transitions. These materials, such as rare earth elements, cobalt, and lithium, are needed for clean energy technologies, semiconductors, and electric vehicles. However, many countries remain dependent on a small number of suppliers for key inputs, creating vulnerabilities to supply disruptions, price volatility, and geopolitical risk.To address these challenges, governments are increasingly developing comprehensive policy frameworks that combine domestic production targets, recycling commitments, and strategic partnerships with resource-rich regions.As part of the SMET analysis, which focuses on unlocking critical mineral value chains to support the energy transition, the European Union’s Critical Raw Materials Act (CRMA), is one example of a policy framework aimed at securing diversified and sustainable supplies of critical raw materials through strategic partnerships.ChallengeThe CRMA was introduced to address growing supply chain vulnerabilities and strategic dependencies.[i] It responds to the risk that many critical raw materials are sourced from limited suppliers.Supply chain dependence: For instance, over 90% of the EU’s rare earth element imports come from China, reflecting a high degree of dependence on a single supplier. Similarly, around 60% of the EU’s cobalt is sourced from the Democratic Republic of Congo and largely refined in China, highlighting concentration risks across multiple stages of the supply chain. [ii]Trade considerations: High concentration of supply chains in a limited number of countries increases the EU’s exposure to supply chain and trade-related challenges, as seen in past disruptions to lithium supply from China and cobalt from the Democratic Republic of Congo.[iii]Sustainability standards: Several countries supplying critical raw materials to the EU face challenges in aligning with the EU’s ESG standards, complicating the EU's efforts to source raw materials in line with its environmental and human rights standards ApproachThe CRMA provides a strategic framework to overcome these barriers by establishing resilient CRM supply chains through international partnerships. Central to this approach is the development of Strategic Partnerships, including with resource-rich regions such as the Southern African Development Community (SADC). The EU’s solution comprises five pillars[iv]:Diversify Supply: Reduce reliance on a few countries by building global partnerships.Boost EU Production: By 2030, set targets to extract (10%), process (40%), and recycle (25%) CRMs within the EU.Promote Sustainability: Support recycling and circular use of materials to lower environmental impact.Monitor Risks: Track CRM supply chains and conduct stress tests to improve resilience.Build Global Partnerships: Collaborate with resource-rich countries on fair, sustainable value chains. ConditionsEfforts to ensure the success of the EU’s CRMA strategy have been enabled by:Clear Mandate and Strategic Alignment: A shared recognition across EU institutions of the risks posed by CRM dependency led to strong commitment, aligning the CRMA with broader industrial and climate strategies under the European Green Deal[v].Fast-Track Permitting and Strategic Project Designation: To overcome regulatory delays, the CRMA introduced legally binding permitting deadlines (27 months for extraction, 15 for processing/recycling) and created a special status for “Strategic Projects” that benefit from accelerated approvals and state support[vi].Financial Instruments and Risk Mitigation Frameworks: Investment-readiness was enabled through structured financial support, including access to InvestEU and the European Investment Bank, which co-finance and de-risk private investment in CRM value chains[vii]Administrative Streamlining at National Level: Member States were required to designate single contact points for CRM projects and launch national exploration programs, reducing bureaucracy and creating visibility into geological potential[viii].Central Coordination via the Critical Raw Materials Board: Establishing a new EU-level governance structure, the European Critical Raw Materials Board, ensured ongoing coordination, progress tracking, and alignment across Member States and external partners[ix]. Observed ImpactSince implementing the Critical Raw Materials Act (CRMA) in May 2024, the European Union has made measurable progress towards securing a sustainable and resilient supply of critical raw materials (CRMs).Diversification target: To reduce reliance on any single non-EU country to below 65% by 2030, the EU has launched 47 strategic CRM projects across 13 Member States and is supporting select projects in partner countries outside the EU.[x].Domestic capacity: To meet a projected 12-fold increase in lithium demand by 2030, the CRMA mandates that at least 10% of strategic raw materials be extracted, 40% processed, and 25% recycled within the EU[xi].Global partnerships: The EU has signed multiple strategic partnerships with Southern African countries such as Namibia and Angola to support local value chains and secure sustainable CRM imports[xii].Major projects: Projects like Romania’s Verde Magnesium aim to produce 90,000 tons annually by 2027, enough to meet 50% of the EU’s magnesium supply and contribute to the CRMA’s 10% domestic extraction target[xiii].Recycling push: The CRMA sets a 25% recycling target for strategic raw materials by 2030, and it is actively working to recover CRM-rich components like permanent magnets and batteries[xiv]. What’s Next for the Southern African RegionTo fully capture the value of their abundant natural resources and meet regional development goals and global demand, Southern African countries could take a coordinated step forward by establishing their version of a Critical Raw Materials Framework, inspired by the EU's CRMA. Using a regional forum such as the SADC could help with this. Such an initiative could unlock industrial and economic transformation domestically. Steps to consider may include:Develop a Regional CRMs Strategy: Create a unified SADC policy framework for critical raw materials (CRMs), including a shared priority minerals list, coordinated permitting processes, region-wide recycling targets, and harmonized ESG standards to support sustainable and responsible development.Align ESG and Regulatory Standards: Harmonize environmental, social, and governance (ESG) criteria across member states to attract sustainable investment.Build Regional Value Chains: Invest in local refining, processing, and manufacturing to move beyond raw material exports.Establish a Regional Coordination Body: Create a central SADC authority to coordinate CRM policy, permitting, infrastructure, and trade facilitation.Leverage Strategic Partnerships: Engage the EU and other partners from a unified, value-driven position to co-develop CRM projects and infrastructure.[i] https://eeb.org/wp-content/uploads/2024/12/Digital-Community-Guidelines-for-Strategic-Projects.pdf?[ii] https://pie.net.pl/en/98-of-eu-demand-for-rare-earth-elements-is-met-by-china/[iii] https://www.iea.org/reports/the-role-of-critical-minerals-in-clean-energy-transitions[iv] https://single-market-economy.ec.europa.eu/sectors/raw-materials/areas-specific-interest/critical-raw-materials/critical-raw-materials-act_en[v]https://www.delorscentre.eu/en/publications/eu-critical-raw-materials[vi] https://publyon.com/critical-raw-materials-act-boosting-the-twin-green-and-digital-transition[vii] https://www.iea.org/policies/26760-investeu-equity-investments-for-critical-and-strategic-raw-materials[viii] https://ieu-monitoring.com/editorial/critical-raw-materials-eu-secures-access-to-diversified-and-sustainable-supply/435025[ix] https://www.pubaffairsbruxelles.eu/eu-institution-news/questions-and-answers-on-the-european-critical-raw-materials-act[x] https://www.reuters.com/world/europe/eu-announces-list-47-strategic-metals-projects-2025-03-25[xi] https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/green-deal-industrial-plan/european-critical-raw-materials-act_en[xii]https://www.europarl.europa.eu/RegData/etudes/BRIE/2024/766253/EPRS_BRI%282024%29766253_EN.pdf[xiii] https://www.ft.com/content/f77bf51f-0cae-42bf-8d9c-c11d24dac906[xiv] https://single-market-economy.ec.europa.eu/sectors/raw-materials/areas-specific-interest/critical-raw-materials/critical-raw-materials-act_en](https://fws.weforum.org/images/casestudies/aJYTG0000000rfR4AQ/standard)
Frameworks to Secure Sustainable Critical Mineral Supply Chains
![Leveraging Stock Exchange Structures to Support Junior Miners in Critical MineralsContextSouthern Africa has significant mineral wealth, including critical minerals essential for the global energy transition. However, despite this natural advantage, early-stage exploration activities across the Southern African Region remain underfunded. Many junior mining companies struggle to access the risk capital required to move from geological potential to proven reserves.As part of the SMET analysis, which focuses on unlocking critical mineral value chains to support the energy transition, this is one example of how a mature capital market ecosystem can enable early-stage funding for junior miners. Australia has built a globally recognized capital ecosystem centered around the Australian Securities Exchange (ASX), which supports junior miners from exploration to production. As of 2024, over 700 mining and resource companies, many of which are junior miners[i], are listed on the ASX. The ASX provides a liquid, well-regulated platform that enables junior companies to raise early-stage funding efficiently. ChallengeHistorically, early-stage mining and exploration companies, particularly those focused on critical minerals, faced major hurdles in raising capital. Traditional financing sources like banks and large institutional investors were reluctant to fund high-risk, pre-revenue exploration activities, especially in frontier markets like Africa or Latin America. The lack of access to affordable, flexible financing meant many promising projects stalled before they could demonstrate resource potential or secure offtake agreements.Most junior miners had few options beyond:Relying on high-cost private equity or venture capitalNegotiating complex joint ventures with major mining firms, often giving up controlAttempting listings on generalist exchanges with investor bases unfamiliar with miningThese routes were slow, costly, or simply unavailable, especially to small companies based outside developed markets.ApproachOne example of solutions was showcased in Australia where the Australian Securities Exchange (ASX) offers an established platform for resource-focused companies, with a track record of supporting mining-sector listings. It is used by early-stage critical mineral developers due to its investor familiarity with the sector, streamlined listing processes, and established regulatory framework. ASX's structure includes:Transparent disclosure rules that foster investor confidence [ii].High retail and institutional investor participation in mining equity [iii].Robust technical reporting standards (e.g., JORC Code) that ensure credible geological disclosures [iv].Observed ImpactThe Australian Securities Exchange (ASX) has helped shape the growth and stability of Australia’s mining sector, particularly through capital formation, investor access, and governance structures. Its influence can be observed through several structural features and market dynamics:High Concentration of Mining Listings: As of 2024, approximately one-third of all companies listed on the ASX operate in the mining and resources sector, making it the most mining-intensive major stock exchange globally. This concentration provides investors with exposure to exploration, development, and production-stage companies[v].Significant Capital Raised for Exploration and Development: In 2023, mining companies raised US$3.9 billion on the ASX. Notably, junior explorers secured ~US$860 million, indicating continued investor interest in early-stage discoveries. The ASX ranked as the second-largest global exchange for mining-sector financings, after the Toronto Stock Exchange[vi].Support for Junior Miners: The ASX’s regulatory framework is tailored to accommodate high-risk, early-stage exploration companies. Relatively lower listing thresholds and streamlined disclosure standards allow junior miners to access public markets more easily.[vii]Global Visibility and Liquidity: The ASX provides junior mining companies with international investor access and exposure to both institutional and retail capital pools. This reach has enabled ASX-listed explorers to raise follow-on capital efficiently.[viii].Investor Confidence Through Reporting Standards: The exchange requires compliance with the JORC Code (Joint Ore Reserves Committee), a widely recognized mineral resource and reserve reporting standard. This has contributed to enhanced transparency and investor confidence.[ix]ConditionsExperience from cases like the ASX highlights conditions that support effective capital mobilization for early-stage mineral exploration:Regulatory Clarity: Transparent and predictable listing, reporting, and fundraising rules.Investor Protections: Mechanisms to ensure fair market practices and reduce fraud risk.Capacity Building: Training for regulators, geologists, and market participants to build a credible exploration and reporting ecosystem.Policy Support: Government incentives include tax breaks, exploration credits, or listing subsidies for junior explorers.Regional Cooperation: Cross-border initiatives to harmonize standards and facilitate the creating of a shared SADC mineral exchange or platform. What’s Next for the Southern African RegionDrawing on global benchmarks, stakeholders in Southern African countries could explore the feasibility of regional stock market reforms to improve access to capital for early-stage mining projects. This could involve engagement with mining associations, investment banks, and development partners to assess regulatory and market readiness. Countries with strong geological potential and relatively stable investment environments could serve as pilot markets to test such models. Further steps could include:Hosting investor roadshows and regulatory workshopsDrafting harmonized listing and reporting guidelinesEstablishing partnerships with the ASX or similar entities for knowledge transfer [i] https://www.listcorp.com/asx/sectors/materials/materials/metals-mining/diversified-metals-mining[ii] https://www.asx.com.au/documents/rules/Guidance_Note_8.pdf[iii] https://www.reuters.com/markets/commodities/australia-digs-top-destination-mining-listings-2025-03-24/[iv] https://www.asx.com.au/content/dam/asx/rules-guidance-notes-waivers/asx-listing-rules/appendices/Appendix_05A.pdf[v] https://www.asx.com.au/content/dam/asx/about/media-releases/2025/02-07-january-2025-asx-group-monthly-activity-report-december-2024.pdf[vi] https://www.spglobal.com/market-intelligence/en/news-insights/research/australia-mining-by-the-numbers-2023[vii] https://asic.gov.au/regulatory-resources/takeovers/mining-and-resources-forward-looking-statements/#:~:text=If%20your%20company%20is%20listed,a%20production%20target%2C%20is%20based.&text=Even%20if%20disclosure%20complies%20with,misleading%20under%20the%20Corporations%20Act[viii] https://www.reuters.com/markets/commodities/australia-digs-top-destination-mining-listings-2025-03-24[ix] https://www.asx.com.au/content/dam/asx/about/media-releases/2025/02-07-january-2025-asx-group-monthly-activity-report-december-2024.pdf](https://fws.weforum.org/images/casestudies/aJYTG0000000rh34AA/standard)
Mobilizing Capital for Early-Stage Mineral Exploration
![Mining Sector Reform to De-risk Investment and Unlock Value ContextGuinea holds the world’s largest bauxite reserves, accounting for over 25% of global supply. Despite this abundance, the country historically struggled to convert mineral wealth into broad-based economic development due to challenges around infrastructure, governance, and limited processing capacity. In the early 2010s, most bauxite exports were raw ore, with minimal value addition occurring locally. Meanwhile, junior mining firms and foreign investors were wary of engaging in high-risk, capital-intensive projects. As part of the SMET analysis, which focuses on unlocking critical mineral value chains to support the energy transition, this is one example of a national reform agenda aimed at attracting investment, promoting local beneficiation, and ensuring community benefits from mining revenues.ChallengeMining projects in Guinea faced a high-risk-return barrier, particularly during the early stages:Capital intensity: High upfront costs for exploration, feasibility studies, and pilot projects.Offtake uncertainty: Difficulty in securing long-term offtake agreements without proven reserves or processing capabilities.Infrastructure gaps: Limited infrastructure, including railways, ports, and roads, created logistical bottlenecks.Tax concerns: Concerns over tax underreporting and revenue leakage through transfer pricing.Community engagement: Local concerns around environmental and social impacts have delayed or challenged project development in several cases. Addressing these concerns through early engagement, transparent communication, and mitigation measures is critical to building trust and ensuring project continuity. These factors reduced project bankability, particularly for junior mining companies with limited financial capacity. SolutionTo address these challenges and derisk the investment landscape, the Government of Guinea implemented a multi-pronged support strategy:Strategic Public-Private Partnerships (PPP): Large-scale mining projects were structured as joint ventures between the state and private operators, supported by financing from development institutions and commercial lenders. [i] [ii]Local Processing and Refining Agreements: New agreements promoted investment in downstream facilities, aligning with national policies to transition from raw ore exports toward local beneficiation and higher value retention. [iii] [iv]Reference Pricing Reform: A transparent pricing framework was introduced, developed in collaboration with international partners, to reduce transfer mispricing and improve fiscal revenues. [vi] [vii] [viii]Risk Guarantees and Infrastructure Enablement: Political risk insurance and government-led investments in rail, port, and road corridors helped reduce logistics costs, improve scalability, and reassure investors. [ix] [x]Community Benefit Schemes: Mining companies were required to contribute a share of revenues into local development funds to support healthcare, education, water, and electrification in host communities, strengthening the social license to operate. [xi] ConditionsSeveral conditions helped enable Guinea’s success in derisking its bauxite sector:Legal reforms: A modernized mining code provided clearer rules and a stronger foundation for investment.Multilateral support: Engagement from international development partners added credibility and safeguards.Equity alignment: Government participation in projects helped align incentives with private investors.Infrastructure development: Large-scale transport investments reduced logistics costs and improved connectivity.Operator credibility: The presence of experienced international operators enhanced technical capacity and investor confidence.Observed ImpactThe strategic transformation of Guinea’s bauxite sector through government support, investment partnerships, and regulatory reform has yielded significant benefits:Export growth: Bauxite exports expanded significantly over the past decade, supported by rising global demand. [xii]Capacity expansion: Major producers increased output through phased capacity upgrades. [xiii]Infrastructure integration: New rail and port facilities enabled higher export volumes and improved logistics efficiency. [xiv]Investment surge: Foreign direct investment in the mining sector has grown substantially compared to earlier levels. [xv]Pricing reform: The introduction of a reference pricing mechanism improved fiscal transparency and boosted government revenues. [xvi] [xvii]Community funding: Revenue-sharing schemes have financed projects in healthcare, education, and rural electrification for host communities. [xviii] What’s Next for the Southern African RegionGuinea’s experience offers practical lessons for Southern African countries seeking to unlock greater value from their mineral wealth while managing risk and attracting investment. Based on the Guinea example, stakeholders could consider: Promote in-country beneficiation: Encourage local processing of minerals (e.g., lithium, copper, platinum) through investment incentives and phased export requirements.Implement reference pricing and fiscal reforms: Establish mineral reference prices to reduce underpricing, combat transfer mispricing, and improve tax collection.Integrate infrastructure and community development: Invest in transport corridors and mandate local development funds to align national growth with community well-being.[i] https://www.inclusivedevelopment.net/cases/guinea-alcoa-rio-tinto-bauxite-mine/[ii] https://www.inclusivedevelopment.net/ifc-campaigns/world-bank-backed-rio-tinto-alcoa-joint-venture-relocates-guinean-village-during-covid-19-lockdown/[iii] https://businessempires.africa/dubai-firm-to-construct-4-billion-alumina-refinery-in-guinea/#:~:text=The%202%20million%20metric%20ton,be%20operational%20by%20September%202026[iv] https://media.ega.ae/egas-gac-signs-term-sheet-with-government-of-guinea-for-development-of-an-alumina-refinery/[v] https://www.reuters.com/markets/commodities/guinea-signs-alumina-refinery-deal-with-emirates-global-aluminium-subsidiary-2024-06-07/[vi] https://www.igfmining.org/impactstory/guinea-bauxite-reference-price/[vii]https://alsf.int/img/Mamadou Ciré Diallo %28ALSF%29_ “The reference price for bauxite enab.pdf[viii] https://www.elibrary.imf.org/view/journals/002/2024/130/article-A001-en.pdf[ix] https://www.miga.org/press-release/ifc-and-miga-support-guineas-growth-bauxite-mining-and-transportation-infrastructure[x] https://www.railway-technology.com/projects/dapilon-santou-rail-project/[xi] https://www.scirp.org/journal/paperinformation?paperid=141549[xii] https://icsoba.org/assets/files/publications/2024/Shorts/KN09S%20-%20Guinea%E2%80%99s%20Golden%20Decade%20of%20Bauxite%20Export%20Growth.pdf[xiii] https://www.dfc.gov/sites/default/files/2019-08/PublicSummaryCBGExpansion%281%29.pdf[xiv] https://discoveryalert.com.au/news/understanding-guinea-s-bauxite-disruption-economic-impacts-and-lessons-from-indonesia/[xv] https://unctadstat.unctad.org/CountryProfile/GeneralProfile/en-GB/324/index.html[xvi]https://alsf.int/img/Mamadou%20Ciré%20Diallo%20%28ALSF%29_%20“The%20reference%20price%20for%20bauxite%20enab.pdf[xvii] https://documents1.worldbank.org/curated/en/099091824172037647/pdf/P500463-3faa4fa0-9469-4056-8754-e27a84ed4820.pdf?utm[xviii] https://www.scirp.org/pdf/nr2025163_32001290.pdf](https://fws.weforum.org/images/casestudies/aJYTG0000000rif4AA/standard)
Mining Sector Reform as a Tool to De-risk Investment and Unlock Value
![Institutional Frameworks for Securing Critical Mineral Supply Chains: Advancing Diversification, Risk Mitigation, and Sustainable Access through Government-backed EntitiesContextAround the world, governments are increasingly recognizing the strategic importance of critical minerals for economic security and the energy transition. National institutions have been created to reduce dependency on single suppliers, support high-risk exploration, and build resilient, sustainable supply chains through financial tools and international partnerships.One example is Japan’s JOGMEC—the Japan Organization for Metals and Energy Security. It was established in 2004 by an integration of the Metal Mining Agency and Japan National Oil Corporation, and it comes under the country's Ministry of Economy, Trade and Industry (METI). It helps with policy implementation that ensures diversification of supply chains and reduces dependencies on single sources. At the heart of JOGMEC’s strategy has been a focus on investments in mines abroad and innovation of new technologies to reduce the use of rare earths.[i]ChallengeJapan faced several interlinked challenges in securing critical mineral supply:Need for diversification: Japan’s reliance on China for over 90% of its rare earth element imports exposed it to supply chain risks. In response, Japan pursued diversification not only to reduce vulnerability to potential trade disruptions but also to enhance the overall resilience and stability of its critical minerals supply chain[ii]Investment risks: The inherent risks of mining projects made it challenging to attract sufficient private capital. To help de-risk investment and catalyze exploration and development, the Japanese government provided support through JOGMEC.ESG standards: To meet increasing sustainability and ESG requirements, Japan recognized the need for an institutional mechanism to support companies in aligning with these standards.Technological gaps: Limited domestic capabilities in certain stages of the critical minerals value chain posed a challenge to Japan’s industrial competitiveness, requiring increased investment and innovation to close the gap.Competition: With other countries accelerating efforts to secure critical mineral supply chains, Japan faced increased pressure to respond swiftly in order to safeguard consistent and reliable access to key materials.SolutionJOGMEC has applied a range of measures to help address challenges facing Japan, including:Equity and debt support: provide funding to Japanese companies to support mineral exploration, development and production projects. This helps with risk mitigation and helps in expediting project completion timelines. A notable example was their investment in the Jujuy Olaroz lithium project in Argentina, which helped in provide funding for Japan’s first lithium project[iii]Debt guarantees: JOGMEC helps in de-risking projects through debt guarantees for development financing and mitigates country risks associated with mining projectsFacilitating PPPs: Through long-term funding and support, JOGMEC facilitates PPPs, as in the case of the Lynas rare earth project in Australia, where they made a $250mn investment which helped in securing a stable supply of rare earths to Japan[iv]Technological upgrade: Support with innovation, technological development, and recycling/pollution mitigation efforts to advance sustainabilityInternational cooperation: By participating in international initiatives such as the Minerals Security partnership (MSP), where Japan has committed to high ESG standards and transparent sourcing. ConditionsKey conditions underpinning JOGMEC’s initiatives could inform approaches elsewhere:Government support: The Ministry of Economy, Trade and Industry has supported with policy frameworks and financial resources for JOGMEC’s initiativesStrategic investments: Agreements made with resource rich nations such as Namibia and the Democratic Republic of Congo, and subsequent investments, has helped in securing access to critical minerals[v]Technological expertise: Support for geological surveys and exploration initiatives enabled riskier projects to be undertaken. In 2023, JOGMEC provided equity support to Waterberg PGM project in South Africa to assist in exploration activities[vi]International alliances: Through partnerships such as the EU-Japan Administrative arrangement on critical raw materials supply chains, JOGMEC has been better able to fulfil its role[vii]Observed ImpactJOGMEC has had an impact on Japan’s position in critical mineral value chains:Diversification of supply chains: Reduced reliance on a single country as a supplier, e.g. Import of rare earths from China went from 90% share to 58% share in the past 10 years[viii]Increased production: New mining and processing projects have strengthened access to key materialsEconomic security: Contributed to national objectives around energy transition and long-term resource securityGlobal leadership: JOGMEC’s example as an institutional framework for securing critical mineral supply can inspire other nations on how to conduct commercial diplomacy for integrating into global critical minerals supply chainWhat’s Next for the Southern African RegionThe institutional architecture that JOGMEC showcases could serve as an example for stakeholders in Southern African countries to considerPolicy considerations: Setting up a raw materials supply resilience entity like JOGMEC and creating policies that enable equity and debt participation, debt guarantees, etc. for risk mitigation and encourage high risk exploration activitiesPublic private partnerships: Leveraging strengths of both the sectors could help the SAR countries achieve successful implementation of mining projectsStrategic investments: Focusing on the capabilities that each country brings into the critical minerals value chain, for example technological innovation, sustainability efforts, could create a multiplier effect for the entire region and promote intra-regional cooperation[i] https://www.newsecuritybeat.org/2024/08/how-to-diversify-mineral-supply-chains-a-japanese-agency-has-lessons-for-all/[ii] https://www.newsecuritybeat.org/2024/08/how-to-diversify-mineral-supply-chains-a-japanese-agency-has-lessons-for-all/[iii] https://eneken.ieej.or.jp/data/11784.pdf[iv] https://www.newsecuritybeat.org/2024/08/how-to-diversify-mineral-supply-chains-a-japanese-agency-has-lessons-for-all/[v] https://www.jogmec.go.jp/english/news/release/news_10_00046.html[vi] https://eneken.ieej.or.jp/data/11784.pdf[vii] https://single-market-economy.ec.europa.eu/news/enhancing-cooperation-japan-critical-raw-materials-supply-chains-through-new-administrative-2023-07-06_en[viii] https://www.newsecuritybeat.org/2024/08/how-to-diversify-mineral-supply-chains-a-japanese-agency-has-lessons-for-all/OTHER SOURCES https://www.jogmec.go.jp/english/stockpiling/metal_10_000003.html https://www.iea.org/policies/16642-jogmec-jbic-financial-support-for-overseas-minerals-projects https://www.jogmec.go.jp/content/300375651.pdf https://dggs.alaska.gov/webpubs/dggs/mp/oversized/mp151_Hiroyuki_Katayama.pdf https://www.oav.de/fileadmin/user_upload/2_Termine/Japan/231025_JOGMEC_presentation_for_Japan-Gremany.pdf https://www.jogmec.go.jp/content/300196027.pdf https://lifezonemetals.com/lifezone-metals-and-japan-organization-for-metals-and-energy-security-jogmec-sign-memorandum-of-understanding/ https://www.accessnewswire.com/newsroom/en/metals-and-mining/namibia-critical-metals-and-jogmec-conclude-agreement-to-develop-the-lofdal-heavy--574171 https://www.cruxinvestor.com/posts/lifezone-metals-secures-strategic-partnership-with-jogmec-bolstering-the-kabanga-nickel-project https://www.jogmec.go.jp/english/oil/oilgas_10_000007.html https://mric.jogmec.go.jp/public/kouenkai/2005-05/JOGMEC_Kunitomo2.pdf](https://fws.weforum.org/images/casestudies/aJYTG0000000rkH4AQ/standard)
Institutional Frameworks for Securing Critical Mineral Supply Chains
![Digital Transformation in Mineral Licensing Systems to Improve Transparency, Streamline Processes, and Boost Investor Confidence in the Mining SectorContextMany resource-dependent economies face challenges in ensuring efficient, transparent, and investor-friendly mineral licensing systems. Traditional paper-based methods can delay approvals, limit data access, and deter investment. Experience from a case like Botswana highlights how digital reforms in mineral cadastre systems can help diversify economies, reduce dependence on single commodities, and attract wider investment. In October 2022, Botswana launched an online Mining Cadastre System as part of its broader strategy to modernize mineral governance and unlock value for the energy transition.[ii] ChallengeBefore the digital transformation, Botswana faced several challenges in its mineral licensing processes:Inefficient Paper-Based System: The traditional system was slow, leading to delays in processing applications and granting licenses[iii]Lack of Transparency: Limited access to information created uncertainties for investors regarding tenure security and procedural clarity[iv]Limited Geological Data Accessibility: Stakeholders had difficulty accessing comprehensive geological data, hindering informed decision-making for exploration and development activities[v]Overdependence on Diamonds: With diamonds accounting for a significant portion of GDP and exports, there was an urgent need to diversify the mineral portfolio[vi]ApproachTo address these challenges, stakeholders in Botswana implemented a comprehensive digital transformation strategy:Online Mining Cadastre System: The platform allows stakeholders to digitally apply for and manage mineral rights, providing real-time updates and interactive web maps. [vii]. Geological Mapping and Data Accessibility: Extensive mapping and use of advanced geoscientific techniques have produced detailed datasets and reports, now available through digital platforms to improve stakeholder access [viii]. Institutional Empowerment: Government institutions have been empowered to oversee implementation of digital tools, ensuring coordinated policy execution and stakeholder engagement [ix].ConditionsSeveral factors facilitated the successful digital transformation of Boswana and could serve as lessons for other countries:Policy Frameworks: The Mines and Minerals Act of 1999 provided a solid legal foundation, outlining clear procedures for licensing and mineral rights management[x]. Strategic Vision: Botswana's Vision 2036 emphasized the need for economic diversification and technological advancement, aligning national goals with sectoral reforms[xi]. Collaborative Approach: Partnerships between government entities and international experts ensured the integration of best practices and technical expertise in the reform process[xii].International Alignment: The reforms align with global best practices, including transparency in licensing and international guidance on digital governance in extractives[xiii].Observed ImpactThe digital transformation of mineral licensing has yielded benefits in Boswana:Increase in Prospecting License Applications: Greater transparency and efficiency through the digital system have led to a rise in applications. [xiv][xv]Expansion of Mineral Portfolio: Utilizing AI and the digital cadastre system, new potential deposits have been identified across multiple mineral categories, including greenstone formations, Mississippi Valley-type lead and zinc deposits, and platinum group metals (PGMs). This helps reduce reliance on diamonds, which previously accounted for ~80% of export revenues[xvi].Improved Data Accessibility: Geological and survey data have been digitized and made more widely available, supporting more informed exploration and investment decisions [xvii].Boost in Investor Confidence: The transparent and efficient digital licensing process has bolstered investor confidence in the sector. A stable legal framework and digital cadastre system have made the country a more attractive destination for mining investments[xviii]. What’s Next for the Southern African RegionExperience from a case like Botswana highlights how digital transformation can provide a benchmark for regional mining governance. Other Southern African countries could consider:Adopt digital cadastre systems: Streamline mineral rights management to reduce processing times, increase transparency, and boost regional investor confidence.Share and digitize geological data: Build regional platforms for geological information exchange to support cross-border exploration and reduce duplication.Align policies on ESG and permitting: Harmonize environmental, social, and governance standards and licensing frameworks to attract responsible, long-term investment.[i] https://apnews.com/article/botswana-de-beers-diamond-deal-ea6abf48813eac6accbcb319163084f5[ii] https://landadmin.trimble.com/wp-content/uploads/2023/05/2-01-Botswanas-Online-Mining-Cadastre-System-Jonathan-Davids.pdf[iii] https://openknowledge.worldbank.org/server/api/core/bitstreams/f36163d9-ea52-5167-98e9-7cc19efae7a0/content[iv] https://www.idea.int/sites/default/files/2025-02/mineral-resource-governance-in-botswana.pdf[v] https://www.bgi.org.bw/geological-mapping[vi] https://www.businesslive.co.za/bd/world/africa/2023-07-17-botswana-must-diversify-reduce-diamond-dependency-imf-says/[vii] https://landadmin.trimble.com/wp-content/uploads/2023/05/2-01-Botswanas-Online-Mining-Cadastre-System-Jonathan-Davids.pdf[viii] https://www.mining.com/web/botswana-geoscience-portal-goes-live/[ix] https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2021/Aug/IRENA_RRA_Botswana_2021.pdf, p. 52[x] https://www.laws.co.bw/download/mines-and-minerals-act-1999-chapter-6601/[xi] https://www.npc.gov.bw/about-botswana-vision-2036[xii] https://www.idea.int/publications/catalogue/html/mineral-resource-governance-botswana[xiii] https://eiti.org/eiti-requirements-2019#r2-2[xiv] https://businessfocus.org.uk/interview-with-olefile-cisco-mashabila-ceo-botswana-geoscience-institute/[xv] https://discoveryalert.com.au/news/ai-transforming-african-mining-2025[xvi] https://discoveryalert.com.au/news/ai-transforming-african-mining-2025/[xvii] https://www.mining-technology.com/news/botswana-diamonds-utilises-ai-to-evaluate-its-mineral-data/[xviii] https://spatialdimension.com/articles/well-implemented-mining-cadastre-systems-could-improve-investment](https://fws.weforum.org/images/casestudies/aJYTG0000000rlt4AA/standard)
Digital Transformation in Mineral Licensing Systems
![Strengthening Intellectual Property Frameworks to Support Innovation, Attract Investment, and Unlock Greater Value from Critical Minerals in the Energy Transition ContextSouthern Africa is rich in critical minerals such as lithium, cobalt, and platinum, which are increasingly vital to global clean energy supply chains. However, historically, many countries in the region have exported these resources in raw form, missing opportunities for value addition and local technological advancement. As part of the SMET analysis, which focuses on unlocking critical mineral value chains to support the energy transition, this case is one example of leveraging intellectual property protections and innovation strategies to advance resource-based industrial development.Experience from a case like South Africa highlights how embedding strong IP protections into broader industrial and research strategies can help countries transform mineral wealth into innovation-led development. South Africa, as the region’s most industrialized economy, has integrated IP systems into its green transition strategies, enabling local value chains, boosting R&D, and protecting mining and green energy innovations. ChallengeDespite South Africa's advancements, many SADC member states face challenges in developing and enforcing effective IP frameworks. These challenges include limited legal and institutional structures and insufficient human and financial resources [i]. Additionally, the lack of harmonized IP laws across the region creates challenges around collaboration and the efficient protection of IP rights[ii].The disparity in IP frameworks also affects the region's ability to attract foreign direct investment (FDI) and to foster innovation. Without adequate IP protection, creators and investors may be reluctant to engage in activities that could drive economic growth[iii]. ApproachSouth Africa offers a structured and successful example of how IP frameworks can be aligned with national development objectives, particularly in the mining and green energy sectors. The following measures outline key aspects of the South African model:TRIPS-Compliant Legal Foundation: A robust legal framework that adheres to the WTO’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, ensuring strong patent protections and alignment with global IP standards[iv]Strategic National IP Policy: A comprehensive policy that connects innovation to industrial development, guiding how IP is managed and leveraged for economic growth[v].Institutional Support for IP Management: A dedicated national IP agency (NIPMO) and streamlined registration processes via CIPC[vi].Innovation Hubs and Collaboration Platforms: Targeted innovation hubs like the Mandela Mining Precinct that foster collaboration and tech transfer[vii].These components offer a scalable model for countries seeking to modernize their IP regimes and link innovation to the green transition. ConditionsSeveral factors could be drawn from the development of South Africa’s IP environment:Focus on innovation through long-term national strategies and policies[viii].Strong institutional capacity, including trained legal professionals and administrative systems[ix].Integration into global IP systems to attract foreign direct investment and technology transfer[x].These elements, with adaptation, are replicable in other SADC contexts. Observed ImpactInnovation Growth: Rising numbers of patent applications, signaling stronger protection and commercialization of new technologies. [xi]Public Research Contributions: Increased share of patent filings originating from universities and research institutions. [xii]Employment Impact: Expansion of jobs in resource-intensive industries, supporting livelihoods and economic stability. [xiii]Investment Attraction: Growing levels of foreign direct investment, with significant allocations to sectors such as mining, processing, and downstream beneficiation. [xiv] These outcomes highlight the catalytic role of strong IP frameworks in driving innovation-led transformation. What’s Next for the Southern African RegionBuilding on this experience, several pathways could be considered across the region:Leveraging regional frameworks: The 2024 SADC–ARIPO MoU and AfCFTA IP Protocol present opportunities to harmonize IP laws.Regional cooperation: South Africa could share best practices with other countries through platforms like mining indabas. Strengthening capacity: More IP training for SMEs, universities, and agencies will improve effective IP use.Encouraging innovation and investment: Regional innovation funds and IP incentives could stimulate R&D and commercialization.Pursuing these pathways could help create a more integrated innovation ecosystem and unlock greater value from the region’s mineral resources. [i] https://www.sadc.int/latest-news/sadc-needs-improve-and-enforce-intellectual-property-rights-frameworks-and-regulations[ii] https://www.sadc.int/latest-news/strengthening-awareness-and-capacity-stakeholders-intellectual-property-rights-grow[iii] https://sajems.org/index.php/sajems/article/view/5699/3155[iv]https://www.tips.org.za/files/Teljeur_IPRs_paper_2003.PDF#:~:text=South%20Africa's%20accession%20to%20the%20TRIPS%20Agreement,international%20treaties%20that%20the%20TRIPS%20Agreement%20incorporates.&text=The%20Agreement%20requires%20minimum%20standards%20of%20IPR,of%20intellectual%20property%20laws%20and%20their%20enforcement[v] https://www.gov.za/sites/default/files/gcis_document/201808/ippolicy2018-phasei.pdf[vi] https://innovationbridge.info/ibportal/content/nipmo [vii] https://www.randwater.co.za/media/forums/presentations/MMP%20overview_Feb%202023.pdf[viii] https://www.wolterskluwer.com/en/expert-insights/spurring-much-needed-innovation-a-look-at-ip-in-africa[ix] https://www.sadc.int/latest-news/sips-conducts-training-strengthening-intellectual-property-rights-policies-and[x]https://www.aripo.org/news/ARIPO%2Band%2BSADC%2BJoin%2BForces%2Bto%2BBoost%2BTRIPS%2BAgreement%2BCompliance%2Bthrough%2BCapacity%2BBuilding-1712908557[xi] https://patentpc.com/blog/wipo-patent-application-statistics-a-global-perspective[xii] https://www.wipo.int/edocs/statistics-country-profile/en/za.pdf[xiii] https://www.mineralscouncil.org.za/reports/2023/[xiv] https://www.tips.org.za/images/REB_Q4_2020_Foreign_direct_investment_projects.pdfStrengthening intellectual property frameworks to support innovation, attract investment, and unlock greater value from critical minerals in the energy transition](https://fws.weforum.org/images/casestudies/aJYTG0000000rnV4AQ/standard)
Strengthening Intellectual Property Frameworks for Energy Transition Mining
![Mining cluster for a transition to advanced battery material productionContextMining clusters play a crucial role in unlocking critical mineral value chains and supporting the global energy transition. By aggregating mining supply, technology, and service firms, such clusters foster innovation, industrial integration, and the development of downstream industries.Experience from a case like Sudbury in Canada illustrates how a mining region can reposition itself to remain competitive and resilient. The Sudbury cluster, which includes more than 300 supply, technology, and service firms, has played an instrumental role in the Battery Electric Vehicles (BEV) sector and mine electrification. The driving force for its development was the need to support the local mining industry while integrating with global supply chains.A notable step was the agreement between Wyloo, an Australian mining company, and the City of Sudbury to develop Canada’s first downstream battery materials processing facility, expected to begin operations in 2027. This facility will source nickel ore from the proposed Eagle Nest mine in northern Ontario, helping to secure supplies for battery manufacturing.[i]ChallengeThe mining industry in Ontario faced several challenges which the Sudbury cluster helped in overcoming:Declining ore reserves: The mines in the surrounding region faced declining ore reserves which made extraction more difficult and increased the cost of doing business[ii]Environmental concerns: Pollution and land degradation resulting from mining required a transition towards sustainable mining practicesTechnological gaps: Adoption of advanced technologies was required to improve mining efficiency, safety and environmental sustainabilityEconomic diversification: Heavy reliance on mining made the local economy vulnerable to supply disruptions and commodity price volatility. Achieving long-term stability required broader economic diversification.Skill development: Upskilling the workforce was essential to meet industry demands and enable the effective use of advanced mining technologies.ApproachThe establishment of the mining cluster was supported by a regulatory and investment framework designed to strengthen the industry and encourage downstream activities.Tax incentives: By offering tax incentives to industries, the federal government has helped in reducing the cost of doing business and made mining operations more attractive for investors[iii]Supporting infrastructure: Local governments committing to infrastructure development to enable growth in the battery electric vehicle sector. Private players planning large-scale battery materials processing facilities, driving significant investment and job creation. [v]Administrative streamlining: Supportive regulatory regime and services which would help in simplifying administrative procedures and help in facilitating commercial activities. This has helped with setting up new businesses within the clusterConditionsSeveral conditions supported the success of the cluster:Government support: Public funding programs backing mining and battery-electric vehicle initiatives, helping clusters grow through grants and non-repayable contributions. [vi] Location advantage: Proximity to key natural resources, skilled labor, and research institutions, combined with strong market access, creates an enabling environment for industry. [vii]Strategic Investments: Wyloo’s proposed new facility would produce components essential for the EV battery supply chain, reinforcing domestic and regional capabilities. [viii]Policy alignment: Supportive national and regional industrial policies providing stability and incentives for long-term growth.Focus on skill development: Targeted investments in education and training institutions to build capabilities aligned with emerging technologies and industry needs.[ix]Observed ImpactThe development of the Sudbury mining cluster has had a wide-ranging impact on mining activity in Ontario, Canada[x]:Increased productivity: Adoption of advanced technologies and practices are expected to improve mining efficiency and productivityEnvironmental sustainability: The region’s long-term ecological health can benefit from the implementation of sustainable mining practices [xi][xii]Securing supplies: Developing an ‘all electric’ underground mine just outside Sudbury to supply more nickel to the cluster, investments in expansion by leading mining companiesCompetitiveness: The growth of the cluster has helped in positioning Sudbury as being a competitive cluster in the mining industry and this has brought international companies and investors onboardPartnerships: Industry networks and innovation platforms expanding to include regional hubs, fostering collaboration across communities and strengthening links along the EV and automotive supply chainWhat’s Next for the Southern African RegionAs Southern African countries shift from a raw material export focus to one centered on local value addition and downstream processing, the following are key considerations they could explore based on examples identified in this paper:Stakeholder collaboration: Clusters that facilitate collaboration between industry, research institutions and governments could help in driving innovation and promoting industrial activityInvestment in technology: Research and development to innovate in mining operations could help in improving production efficiencyEconomic diversification: Having a diverse set of industries within a cluster could help reduce overreliance on the mining sector and make the local economy more resilientWorkforce development: Specialized training programs could help in creating a skilled mining workforce [i] https://www.tattarang.com/news/2024/wyloo-to-build-canadas-first-downstream-battery-materials-processing-facility-in-sudbury/[ii] https://www.northernontariobusiness.com/industry-news/mining/with-nickel-reserves-running-out-sudbury-is-an-expensive-place-for-vale-to-do-business-3899669[iii] https://electricautonomy.ca/policy-regulations/ev-rebates-incentives-funding/2022-11-24/tax-credit-zev-industrial-canada/[iv] https://www.greatersudbury.ca/city-hall/news-and-public-notices/2024/sudbury-drives-bev-innovation-mining-electrification-and-sustainability-efforts/[v] https://www.ctvnews.ca/northern-ontario/article/electric-battery-facility-to-be-built-in-sudbury-creating-hundreds-of-jobs/[vi] https://www.canada.ca/en/fednor/news/2022/07/fednor-invests-over-2-million-to-position-greater-sudbury-as-an-electric-vehicle-battery-hub.html[vii]https://www.innovationnewsnetwork.com/sudburys-critical-minerals-can-drive-canadas-electric-vehicle-industry/24214/[viii] https://www.greatersudbury.ca/city-hall/news-and-public-notices/2024/canadas-first-downstream-battery-materials-processing-facility-to-be-built-in-sudbury/[ix] https://www.canada.ca/en/fednor/news/2022/07/fednor-invests-over-2-million-to-position-greater-sudbury-as-an-electric-vehicle-battery-hub.html[x] https://www.innovationnewsnetwork.com/sudburys-critical-minerals-can-drive-canadas-electric-vehicle-industry/24214/[xi] https://www.thewhig.com/news/kingston-greater-sudbury-join-forces-to-take-on-canadas-battery-electric-vehicle-sector[xii] https://sustainablebiz.ca/wyloo-aims-to-sate-nickel-demand-for-ev-batteries-with-ring-of-fire-mineOTHER SOURCEShttps://www.northernontariobusiness.com/regional-news/far-north-ring-of-fire/sudbury-to-host-canadas-first-battery-metals-processing-plant-8890313 https://www.cbc.ca/news/canada/sudbury/battery-electric-vehicle-conference-sudbury-1.6458427 https://www.ctvnews.ca/northern-ontario/article/future-of-battery-electric-vehicles-the-focus-at-sudbury-conference/ https://www.nationalobserver.com/2024/06/11/news/ontario-ev-battery-recyclers-get-10m-critical-minerals-recovery https://cambriancollege.ca/news/2024/09/vale-base-metals-contributes-750000-to-cambrian-college-electric-vehicle-lab](https://fws.weforum.org/images/casestudies/aJYTG0000000rp74AA/standard)
Mining Cluster Driving Battery Materials Processing
![Mobilizing Multi-Stakeholder Finance for Strategic Critical Mineral DevelopmentContextDeveloping large-scale critical mineral projects in emerging markets requires substantial capital, long lead times, and coordinated stakeholder engagement. Access to financing is often constrained by high perceived risks, market volatility, and infrastructure requirements, yet these projects are essential to meet the growing demand for minerals powering the global energy transition.As part of the SMET analysis, which focuses on unlocking critical mineral value chains to support the energy transition, this is one example of how a consortium approach, combined with strategic offtake agreements, can unlock funding for high-impact projects. In Tanzania, the Mahenge Project, operated by Faru Graphite Corporation, a subsidiary of Australia’s Black Rock Mining, secured USD 179 million from a mix of development finance institutions (DFIs), commercial banks, and an international industrial partner, enabling both mine development and supporting infrastructure.[ii]ChallengeFinancing is a major challenge for the mining industry, particularly for supporting infrastructure projects, due to the heightened risk perception around them: High capital requirements: The Mahenge Graphite corporation had funding requirement of $222million in upfront capital and was challenging for Blackrock mining to arrange using traditional funding mechanisms[iii]Additional infrastructure investments: Investment in the project also required upgrading supporting infrastructure, including a 220 kV powerline from Ifakara to Mahenge. However, such infrastructure only delivers impact if there is sufficient generation capacity; securing a reliable power supply was essential to enabling both mining operations and broader electrification.[iv]Market volatility: Demand for graphite is uncertain and the graphite market is influenced by global supply-demand dynamics, which have typically been dominated by China’s production and pricingRehabilitation bond requirement: The project had to deal with a strict financial security, in the form of a $26million rehabilitation bond for mine closure, which brought additional funding requirements[v]ApproachThrough jointly coordinated fund-raising efforts the project was able to raise the necessary funding, as well as public sector involvement and local value addition. This was made possible through a combination of innovative financing, strategic partnerships, and commercial offtake agreements: Financing structure: The total package of $179milliom on financing included a $113million construction term loan, $20million revolving credit for working capital, $20million cost overrun facility, and a $26million rehabilitation guarantee. The commitments by the lenders are as follows, $66million by CRDB bank, $59.6million by DBSA and $53.4million by IDC[vi]Offtake agreement: POSCO helped by investing $40million in equity and provided a $10million prepayment facility. They also secured offtake rights for Graphite mined from Mahenge Module 2 and ensured de-risking of the project by providing a clear demand stream for the Graphite produced[vii]Public sector involvement: By securing a free-carried interest and consolidating mining licenses into a Special Mining License, the Government of Tanzania aligned the project’s commercial objectives with national development priorities[viii]Local value addition: Involvement of local suppliers such as the Taifa Group into the project helped secure $37.9million for mining services contract, meet local requirements, and create regional economic opportunities[ix]ConditionsSeveral factors underpinned the successful mobilization of funds: Graphite’s role in value chains: With rising demand driven by the energy transition and electric vehicles, Mahenge successfully positioned itself as a key graphite supplier in the global battery value chain.Development finance institutions in Africa: DBSA and IDC played a role in mobilizing financing, leveraging their infrastructure and industrial development expertise to support regional economic growth.CRDB Bank’s role: Tanzania’s largest commercial bank, CRDB, served as joint mandated arranger, facility agent, and onshore account bank, ensuring alignment with local regulatory and operational frameworks.Offtake agreements by POSCO: POSCO’s equity investment and offtake commitments provided market assurance and helped de-risk the project, boosting lender confidence and supporting financial close.Enabling policy support: The government’s investments in power and logistics infrastructure, including regulatory support for transmission development and streamlined licensing, signaled a strong commitment to facilitating inbound investment.Observed ImpactThe financing package is expected to deliver substantial benefits including:[x]: Graphite production: Tanzania is projected to become a major player in the global graphite market, contributing approximately 12% of global output by 2030[xi]Employment generation: The project is expected to generate around 500 direct and indirect jobs, while also expanding opportunities for local suppliers in the Mahenge and Ulanga districts[xii]Creation of enabling infrastructure: The construction of a 220 kV powerline not only supports mining operations but also enables electrification of nearby villages, creating broader community impact provided it is paired with sufficient energy generation for reliable supply.[xiii]What’s Next for the Southern African RegionSuccess of this project and the steps taken by the Mahenge Graphite Corporation in arranging financing could help other countries and financial institutions devise their own strategies: Consortium structures: Resource pooling from multiple lenders could lower risks for all and generate additional funding for the projectStrategic partnerships: Engaging global downstream players, such as POSCO, could secure long-term demand, provide market assurance, and lower risk for lenders.Local value addition: Prioritizing local suppliers and contractors enhances community benefits, supports industrialization, and meets regulatory expectations. It can also strengthen government support by aligning private sector efforts with national development goals.[i] https://www.ippmedia.com/the-guardian/business/read/miner-gets-100bn-fund-to-construct-graphite-project-2024-03-29-103400#google_vignette[ii] https://crdbbank.co.tz/en/about-us/media-center/blog-post/crdb-bank-secures-tzs-790-billion-investment-mahenge-graphite-mining-project[iii] https://www.ippmedia.com/the-guardian/business/read/miner-gets-100bn-fund-to-construct-graphite-project-2024-03-29-103400[iv] https://blackrockmining.com.au/wp-content/uploads/BlackRockSignsUSD179mFacilitiesAgreement16Sep24.pdf[v] https://dailynews.co.tz/crdb-secures-790bn-investment-for-mahenge-graphite-project/[vi] https://crdbbank.co.tz/en/about-us/media-center/blog-post/crdb-bank-secures-tzs-790-billion-investment-mahenge-graphite-mining-project[vii] https://blackrockmining.com.au/wp-content/uploads/BlackRockSignsUSD179mFacilitiesAgreement16Sep24.pdf[viii] https://blackrockmining.com.au/wp-content/uploads/BlackRockSignsUSD179mFacilitiesAgreement16Sep24.pdf[ix] https://smallcaps.com.au/black-rock-mining-multiple-funding-investments-mahenge-graphite/[x] https://www.thecitizen.co.tz/tanzania/business/tanzania-s-mahenge-graphite-project-secures-179-million-financing-boost-4764890[xi] https://www.ippmedia.com/the-guardian/business/read/miner-gets-100bn-fund-to-construct-graphite-project-2024-03-29-103400[xii] https://crdbbank.co.tz/en/about-us/media-center/blog-post/crdb-bank-secures-tzs-790-billion-investment-mahenge-graphite-mining-project[xiii] https://crdbbank.co.tz/en/about-us/media-center/blog-post/crdb-bank-secures-tzs-790-billion-investment-mahenge-graphite-mining-projectOTHER SOURCEShttps://smallcaps.com.au/black-rock-mining-mahenge-debt-financing-facility-african-banks/ https://blackrockmining.com.au/wp-content/uploads/BKT_Approval_for_US40m_in_new_debt_facilities_from_CRDB_Bank.pdf](https://fws.weforum.org/images/casestudies/aJYTG0000000sur4AA/standard)
Mobilizing Multi-Stakeholder Finance for Strategic Critical Mineral Development
![Mobilizing International Development Finance for Strategic Critical Minerals ProjectsContextSecuring reliable and sustainable supplies of critical minerals is essential for the global energy transition, yet many high-potential projects in emerging markets face persistent financing barriers. Challenges such as commodity price volatility, infrastructure gaps, and heightened risk perceptions often deter private capital, slowing the development of vital mineral value chains.As part of the SMET analysis, which focuses on unlocking critical mineral value chains to support the energy transition, this is case was identified as one example of how international development finance can be leveraged to advance strategic projects. In Mozambique, the Balama Project, operated by Australia-based Syrah Resources, secured USD 150 million from the US International Development Finance Corporation (DFC) to expand production capacity, strengthen resilience in a key global supply chain, and maintain alignment with high environmental, social, and governance (ESG) standards.ChallengeFinancing is a major challenge for the mining industry, and this is exacerbated by a range of concerns that increase risks for investors: High capital requirements: The Balama Graphite Project required significant capital to expand its tailings storage facility and conduct feasibility studies for vanadium resource development.Market volatility: Demand for graphite is uncertain and the graphite market is influenced by global supply-demand dynamics. Production in Mozambique of graphite, faced a 40% decline (59,000 tons in first half of 2023 to 35,000 tons in first half of 2024) due to disruption at two mines – GK Ancuabe Graphite Mine since 2023, and the Twigg Mining and Exploration – and due to low global demand and price volatility[i]Financing constraints: Heightened risk perceptions for mining projects makes it challenging to secure non-dilutive funding for large-scale mining projects in emerging marketsApproachThe US DFC provided a USD 150 million loan to the Balama Project, structured to address both short-term operational needs and long-term expansion plans: Loan structure: The $150 million loan by DFC was divided into two tranches - $100 million for current expansion of the tailing storage facility and vanadium resource development and $50 million for a longer-term expansion of the tailing storage facility[ii]Non-dilutive funding: Syrah Resources was able to maintain its equity structure while securing the necessary funding for running Balama’s operationsDue diligence process: Three-year long process which included market, technical, legal, environmental and social assessments, ensuring a comprehensive risk management strategy[iii]Operational capital: The loan served an important purpose of securing working capital for Balama, which ensured that the project could continue functioning despite the challenges faced due to the force majeure declarationConditionsSeveral factors supported the successful mobilization of development finance: Graphite’s role in value chains: With the energy transition and shift towards electric vehicles generating a strong demand for graphite, Balama was able to position its role as a key supplierRisk mitigation: The project’s comprehensive due diligence process allowed it to comply with international standardsStrong partnerships: The collaboration between Syrah Resources, DFC, and the Government of Mozambique ensured that the funding could materialize as all the relevant stakeholders were aligned on the need for additional resources[iv]Observed ImpactThe financing of the Balama Graphite Project is expected to have positive consequences for securing graphite value chains: Graphite production: Funding to support the expansion of the tailing storage facility and operational capital enabled Balama to maintain and potentially increase its production capacity from the current yield of 350,000 tons per annum of graphite concentrate, from a total reserve of 110 MT of graphite ore[v]Supply chain: The transaction could help in making the supply chain more diverse, resilient and sustainable, and may help enhance investor confidence to boost investment in Africa[vi]Market positioning: Financing of the Balama Graphite Project and the steps being taken for its future expansion position Syrah Resources as a key player in the global graphite market and an instrumental role in the clean energy value chain[vii]What’s Next for Southern African RegionThis example demonstrates how international development finance can play a catalytic role in advancing large-scale mineral projects: Strategic partnerships: Involvement of international development financial institutions such as the DFC could provide critical funding and help reduce perceived risks of large-scale mining projectsRisk mitigation strategies: By ensuring comprehensive due diligence before financing, potential risks could be addressed early on, enhancing investor confidence and helping to secure fundingESG focus: Aligning critical mineral projects with the energy transition and high ESG standards can attract green financing from international investors.[i] https://clubofmozambique.com/news/mozambique-australias-syrah-gets-first-tranche-of-us-funding-for-graphite-mine-270429/[ii] https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02873940-3A654408[iii] https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02873940-3A654408[iv] https://www.listcorp.com/asx/syr/syrah-resources-limited/news/syrah-receives-first-disbursement-from-dfc-loan-3113615.html[v] https://www.mining-technology.com/news/syrah-resources-150m-loan-waiver-balama-graphite-mine/?cf-view[vi] https://www.chemanalyst.com/NewsAndDeals/NewsDetails/syrah-secures-dfc-loan-to-overcome-challenges-in-the-graphite-market-31138[vii] https://www.chemanalyst.com/NewsAndDeals/NewsDetails/syrah-secures-dfc-loan-to-overcome-challenges-in-the-graphite-market-31138OTHER SOURCEShttps://www.capitalbrief.com/briefing/syrah-resources-jumps-on-us-funding-deal-for-balama-project-6a5292dc-28c4-4e90-a707-4477a276f217/ https://www.argusmedia.com/en/news-and-insights/latest-market-news/2644474-syrah-resources-secures-mozambique-graphite-loan-waiver https://www.miningweekly.com/article/syrah-receives-first-53m-disbursement-from-dfc-loan-2024-11-11 https://smallcaps.com.au/syrah-resources-major-us-backing-balama-graphite-project-mozambique/](https://fws.weforum.org/images/casestudies/aJYTG0000000swT4AQ/standard)
Mobilizing International Development Finance for Strategic Critical Minerals Projects
![Shared Transport Infrastructure to Support Mineral ExportsContextEfficient, reliable transport infrastructure is essential for moving critical minerals from production sites to processing facilities and export markets. In Southern Africa, mining operations are often located far from major transport hubs, requiring costly private investment in roads, rail, and related logistics. Fragmented or single-user infrastructure increases costs, limits economies of scale, and reduces competitiveness in global markets.Shared infrastructure models — where multiple sectors, users, and countries benefit from the same transport corridor, can lower costs, improve efficiency, and deliver wider socio-economic benefits.One example is the Bakwena Platinum Corridor, a 385 km toll route connecting Pretoria to the Botswana border, which plays a key role in transporting platinum group metals (PGMs) and other commodities across the region.Through shared infrastructure development, including toll systems and traffic control centers, the region saw reduced transport costs, job creation, and significant community development. ChallengeSADC mining operations, especially those focused on critical minerals like lithium, cobalt, and rare earth elements, are often isolated and underserved by infrastructure. Fragmented infrastructure investments increase costs, slow timelines, and reduces the global competitiveness of mineral exports.Environmental, social, and governance (ESG) concerns, from local employment to emissions, compound these challenges. Many SADC miners must independently finance roads, energy, and water, discouraging new entrants and stifling regional integration. ApproachThe Bakwena Platinum Corridor has helped facilitate transportation financing for critical minerals[ii]:Leveraging private equity: Expertise from AIIM leveraged in the fields of project finance, hedging and risk management, funding secured through debt marketsDebt refinancing: In 2009, Bakwena refinanced ZAR 3.7bn of debt, which was the largest infrastructure project refinancing in South Africa at the time. This helped to create a more robust financial structure, along with ensuring long term financial sustainabilityUser-Pay Principle in roads: This approach allows those who use the roads to directly fund their maintenance and operation through tolls or fees. It reduces dependence on public budgets and promotes more sustainable infrastructure financing.Electronic tolling: South Africa’s first electronic tolling system, streamlined toll collection and enhanced operational efficiency, this also helped in optimizing the required capital expenditureConditionsSeveral conditions supported the success of this shared infrastructure model:Public-Private Partnership (PPP) Model: The project was structured through a 30-year concession agreement between SANRAL and Bakwena, enabling efficient infrastructure delivery via a public-private partnership[iii].Government policies: Regulatory frameworks provided structure for multi-stakeholder collaboration and consistent project delivery for example, through the concession agreement framework used in public-private partnershipsAnchor Investors: AIIM and Old Mutual Alternative Investments provided critical equity and financial expertise, enabling the successful R3.7 billion debt refinancing and long-term capital alignment[iv].Institutional Coordination: Cross-agency coordination ensured integration of logistics, safety enforcement, and local development priorities along the corridor.Technology Integration: The rollout of interoperable electronic tolling systems enhanced efficiency, reduced delays, and supported real-time traffic and revenue management[v].Observed ImpactThe shared infrastructure approach yielded benefits including:Efficiency Gains: Export timelines reduced due to optimized logistics and fewer road downtimes.Traffic Control for Overloading: Bakwena implemented traffic control centers to monitor and reduce vehicle overloading, mainly from mining trucks. This initiative helped minimize road surface damage, lower CO₂ emissions from road reconstruction, and increase road safety, indirectly benefiting the environment.Employment Creation: Over 4,800 jobs created along the Bakwena corridor — 3,300 during initial construction and 1,500 through the life of the concession[vi]Regional Integration: The corridor links mineral-rich zones across South Africa, Botswana, Zimbabwe, and Namibia (SADC Transport Strategy).Social Uplift: R130.5 million invested in health, education, and environmental initiatives along the corridor[vii].What's Next for the Southern African RegionThe Southern African Region holds vast reserves of critical minerals for clean energy. Building on the PGM sector’s shared infrastructure model, member states could:Identify Strategic Corridors: Conduct geological and infrastructure mapping across lithium, copper, and rare earth zones.Facilitate Investment Platforms: Launch blended finance and sovereign guarantee-backed investment vehicles.Strengthen Regional Governance: Harmonize infrastructure and mining regulations across borders[viii].Incentivize Collaboration: Implement tax reliefs, fast-track licensing, and support for shared infrastructure.Replicate Success: Apply the model to lithium (Zimbabwe), copper (Zambia-DRC), and REE corridors (Namibia) with development bank support.Through collaborative infrastructure, SAR countries could fast-track the development of their mineral wealth, support a just energy transition, and foster regional prosperity.[i] https://aiimafrica.com/media/3374/case-study-bakwena-final.pdf[ii] https://aiimafrica.com/media/3374/case-study-bakwena-final.pdf[iii]https://documents1.worldbank.org/curated/en/776191468338369513/pdf/937780NWP00PUB0aper00SSATPWP1020PPP.pdf[iv] https://aiimafrica.com/media/3374/case-study-bakwena-final.pdf[v] https://www.sanral.co.za/e-toll/app/gort_xml/files/content/documents/Bakwena%20opt%20in%20(using%20your%20tag%20to%20transact%20at%20Bakwena%20toll%20plazas).pdf[vi] https://aiimafrica.com/media/3374/case-study-bakwena-final.pdf[vii] https://aiimafrica.com/media/3374/case-study-bakwena-final.pdf[viii] https://www.sadc.int/sites/default/files/2021-06/Protocol_on_Mining.pdf](https://fws.weforum.org/images/casestudies/aJYTG0000000sy54AA/standard)
Shared Transport Infrastructure to Support Mineral Exports
![Long-term power infrastructure investment and strategic partnerships to unlock large-scale copper productionContextAs the global economy shifts toward decarbonization and digitalization, demand for critical minerals, such as copper, cobalt, and lithium, has surged dramatically. These resources are essential to renewable energy systems, electric vehicles, and advanced electronics. Unlocking this potential, however, often depends on addressing significant infrastructure and investment barriers.One example is the case of Ivanhoe Mines in the Democratic Republic of Congo, where public–private collaboration and cross-border energy integration helped address power shortages, stabilize operations, and enable world-class copper developments such as the Kamoa-Kakula Copper Complex.ChallengeThe Kamoa-Kakula project faced multiple challenges:Power Shortages: The national grid couldn’t reliably meet industrial demand, forcing reliance on costly diesel generators[i].High Energy Costs: Diesel power was up to four times more expensive than grid electricity.[ii]Transport Bottlenecks: Over 150 truckloads moved daily to distant ports, with logistics accounting for more than 30% of total cash costs.[iii]Regulatory Uncertainty: Mining code reforms in 2018 removed key investor protections, raising perceived risk.[iv]Limited Infrastructure for Small Operators: Smaller miners lacked the capital to fund energy and logistics solutions, limiting sector-wide growth.[v]ApproachTo address these constraints, Ivanhoe Mines pursued a multi-layered strategy Hydropower rehabilitation: In partnership with the state-owned Société Nationale d'Électricité (SNEL), Ivanhoe rehabilitated the Mwadingusha hydroelectric plant, restoring 78 MW of clean power for Kamoa-Kakula.[vi]Cross-border electricity imports: The company imported additional hydroelectric power via the Zambian interconnector, sourcing supply from Mozambique to stabilize operations.[vii][viii]Backup power: On-site diesel generation provided supplementary supply during grid instability or maintenance, ensuring uninterrupted operations.[ix]ConditionsSeveral conditions supported the project:Equity-Funded Risk Tolerance: Early-stage investments were financed through equity despite high country risk.[x][xi]Public-Private Collaboration: Partnership with SNEL aligned the project with national energy priorities and expedited regulatory approvals.[xii][xiii]Observed ImpactThe energy strategy has delivered significant outcomes:Record production: Output levels significantly exceeded initial guidance, highlighting the mine’s ability to ramp up operations faster than expected.[xiv][xv]Improved power supply: Additional hydropower imports expanded capacity and enhanced operational stability. [xvi]Operational efficiency: Greater power availability enabled downstream processing capacity, reducing transport costs by more than 50%.[xvii]Environmental performance: Reliance on renewable hydropower positioned the operation among the lowest GHG-emitting major copper mines. [xviii]Renewable expansion: A new solar power agreement, combined with battery storage, is expected to provide continuous green power and cut emissions by 77,750 tonnes annually. [xix]What’s Next for the Southern African RegionThe Ivanhoe Mines case study offers valuable lessons for other Southern African countries aiming to unlock their mineral wealth while addressing infrastructure and investment challenges. Key takeaways for consideration could include:Leverage public-private partnerships (PPPs): Similar models can help rehabilitate aging energy infrastructure in Zambia, Mozambique, and Zimbabwe.Strengthen regional integration: Expanding cross-border electricity trade and developing regional corridors like the Southern African Power Pool and Lobito Corridor can reduce costs and improve export competitiveness.Align policy with ESG goals: Stability clauses, transparent permitting, and renewable-powered mining can help attract climate-aligned capital and lower investment risk.[i] https://www.ivanhoemines.com/news-stories/news-release/ivanhoe-mines-issues-2024-first-quarter-financial-results-and-overview-of-construction-and-exploration-activities/[ii] https://www.weg.net/institutional/TZ/fr/news/produits-et-solutions/zest-energy-provides-mobile-power-for-kamoa-kakula-mine-development-in-the-drc[iii] https://www.ivanhoemines.com/wp-content/uploads/20230816_lobito_corridor_trial_shipments_vf.pdf[iv] : https://www.state.gov/reports/2018-investment-climate-statements/congo-democratic-republic-of-the[v] https://www.africafc.org/news-and-insights/news/AFC-invests-in-Africas-largest-copper-complex[vi] https://www.andritz.com/hydro-en/hydronews/hn35/mwandingusha-dr-congo[vii] https://www.greenbuildingafrica.co.za/ivanhoe-copper-mine-complex-in-drc-imports-power-from-zambia-and-mozambique/[viii] https://www.waterpowermagazine.com/news/ivanhoe-mines-secures-increased-hydropower-supply-to-boost-kamoa-kakula-operations/[ix] https://www.mining.com/press-release?id=67c8674f3b97134ab6a02a95[x] https://www.ivanhoemines.com/wp-content/uploads/2025-01-08-IVN-Investor-Presentation_c-002.pdf[xi] https://www.fitchratings.com/research/corporate-finance/fitch-assigns-ivanhoe-mines-first-time-b-idr-outlook-stable-10-01-2025[xii] https://www.ivanhoemines.com/news-stories/news-release/kamoa-kakula-joint-venture-signs-agreement-with-the-drcs-state-owned-power-company-to-upgrade-turbine-5-at-the-inga-ii-hydropower-complex/[xiii] https://www.esi-africa.com/industry-sectors/generation/drc-hydropower-strengthened-by-snel-and-mining-groups-ppp/[xiv] https://www.mining.com/ivanhoe-shares-rise-on-hydropower-boost-q1-production-results/[xv] https://www.stocktitan.net/news/IVPAF/ivanhoe-mines-reports-strong-copper-and-zinc-production-in-the-first-ahyx28xozj3c.html[xvi] https://www.miningreview.com/central-africa/ivanhoe-mines-boosts-hydroelectric-power-for-kamoa-kakula/[xvii] https://www.ivanhoemines.com/what-we-do/operations-projects/kamoa-kakula-mining-complex/[xviii] https://www.ivanhoemines.com/what-we-do/operations-projects/kamoa-kakula-mining-complex/[xix] https://crossboundaryenergy.com/kamoa-copper-and-crossboundary-energy-sign-agreement-for-a-groundbreaking-baseload-renewable-energy-system-in-the-drc/](https://fws.weforum.org/images/casestudies/aJYTG0000000szh4AA/standard)
Power Infrastructure Investment in Mining
![Example of an offtake agreement to secure supply of rare earth elements from a Southern African projectContextExperience from a case like Angola highlights how offtake agreements can help unlock critical mineral value chains needed for the energy transition. In this example, a rare earth miner in Angola and a Japanese trading company signed an offtake agreement covering 20,000 tonnes per year of mixed rare earth carbonate (MREC) from the Longonjo project. Once in full production, the project is expected to supply ~5% of global neodymium and praseodymium output. The agreement is designed to strengthen supply chains for magnet metal materials used in electric and fuel cell vehicles and includes provisions for financial support from the Japanese partner.[i]ChallengeIn the absence of detailed agreements, critical mineral supply faces several challenges:Demand volatility: Rapid shifts in global demand, driven by technologies like electric vehicles, have created imbalances in the supply of rare earth elements such as neodymium and praseodymium.Market access: Smaller mining companies struggle to secure access to international markets, which limits their ability to scale operations and attract investment.Financial constraints: Mining projects require significant upfront capital, but investors hesitate when future demand is uncertain.Supply chain vulnerability: Heavy reliance on a few dominant suppliers exposes vulnerabilities in global supply, highlighting the need for diversification and resilience.SolutionThe two companies entered a non-binding Memorandum of Understanding (MoU) that secures offtake for 20,000 tonnes of MREC annually, creating stability for both sides[ii]:Financial support: The Japanese partner considered providing funding to support project development and expansionStrategic cooperation: The agreement included provisions for marketing and distribution of MREC, integrating it into the global supply chain for magnet metal materialsValue chain investment: The Japanese partner explored opportunities to invest both upstream and downstream to build a low-carbon magnet metal supply chainESG compliance: The agreement also supported adherence to international ESG standards, strengthening the project’s attractiveness globallyConditionsThe agreement was enabled by several factors[iii]:Stakeholder support: Consideration of financial backing from governments helped enable project progressStrategic location: Proximity to the Lobito Corridor supported efficient transportation and export of rare earthsMarket demand: Growth in electric vehicles and renewable energy technologies created favorable conditionsTechnical expertise: Access to experienced consultants and engineers ensured industry standards were metCost competitiveness: The project’s upfront capital cost of US$217 million was among the lowest in its peer group, strengthening its competitiveness[iv]Observed ImpactThe agreement is expected to deliver lasting benefits:Stable revenue: A predictable revenue stream reduces financial uncertainty.De-risking: Secured market access enhances investment attractiveness.Production capacity: The project aims to produce 20,000 tonnes per year of MREC in 2026, expanding to twice that by 2029[v].Economic development: Job creation in the Huambo region contributes to local economic growth.What’s Next for the Southern African RegionAs demand volatility persists, Southern African stakeholders can draw lessons from this case to pursue:Strategic partnerships: Helping smaller miners access global markets, technical expertise, and financing.Innovative financial structuring: Embedding financial support mechanisms such as convertible loan facilities.ESG compliance: Meeting international standards to secure green financing opportunities.[i] https://pensana.co.uk/wp-content/uploads/2024/09/Offtake-and-Co-operation-Agreement-with-Hanwa.pdf [ii] https://pensana.co.uk/wp-content/uploads/2024/09/Offtake-and-Co-operation-Agreement-with-Hanwa.pdf[iii] https://pensana.co.uk/wp-content/uploads/2024/09/Offtake-and-Co-operation-Agreement-with-Hanwa.pdf[iv] https://www.directorstalkinterviews.com/pensana-signs-offtake-and-co-operation-agreement-with-hanwa/4121170923[v] https://www.intellinews.com/angola-focused-rare-earths-miner-pensana-signs-offtake-deal-with-hanwa-amid-ev-and-fcv-push-342485/ OTHER SOURCES https://www.miningweekly.com/article/pensana-signs-mou-for-offtake-with-japanese-group-hanwa-2024-09-09 https://www.seaisi.org/details/25366?type=news-rooms https://www.marketscreener.com/quote/stock/HANWA-CO-LTD-6492255/news/Angola-focused-rare-earths-miner-Pensana-signs-offtake-deal-with-Hanwa-amid-EV-FCV-push-47830984/ https://projectblue.com/blue/opinion-pieces/1023/pensana-signs-co-operation-and-offtake-with-major-japanese-group,-hanwa- https://www.prnewswire.co.uk/news-releases/regulatory-news/pensana-plc-offtake-and-co-operation-agreement-with-hanwa-817495222.html](https://fws.weforum.org/images/casestudies/aJYTG0000000t1J4AQ/standard)
Offtake Agreement for Rare Earth Supply
