The critical minerals opportunity

The clean energy transition promises a break from fossil-fuel dependency. But it hinges on a new dependency: critical minerals. 

Copper, cobalt, lithium, and nickel are no longer niche industrial inputs but essential ingredients for clean energy technologies. By 2040, demand for these minerals is expected to increase fourfold. They are geopolitical assets, development opportunities, and climate essentials all at once. And yet, the system that governs their extraction, trade, and transformation remains fragile. 

Production and processing are highly geographically concentrated, investment cycles are long, and prices are prone to sharp volatility. Their status as “critical” is not fixed either: demand and supply projections evolve with energy strategies, advances in recycling and substitution, and the discovery of new reserves.

Africa holds 30% of the world’s reserves of critical minerals. Countries like Zambia and the Democratic Republic of Congo are now central to the world's decarbonisation agenda. 

However, being central doesn’t automatically mean being in control. Most mineral-rich nations operate at the edge of global value chains—present, essential, but peripheral. The pattern is familiar: extract, export, and wait. Industrialisation rarely follows, but volatility almost always does.

Figure 1: Critical minerals needs for clean energy technologies

From extraction to integration

Government mining policy is often portrayed as a stark two-way choice. They can continue to treat mining as an enclave sector that generates royalties and tax revenues but contributes little to economic development and growth. Or they can take strong action like Indonesia did with nickel, such as export bans on raw minerals to jumpstart local industry—as Indonesia did with nickel, rapidly expanding local processing. These protectionist policies can yield results under suitable conditions; however, they also involve risks, particularly for countries without a dominant market share of a mineral or the infrastructure to support rapid scaling. 

There is another path: combining smart regulation, public investment in infrastructure, and targeted industrial policy that together can make local value addition possible and profitable. This includes local value-addition and content policies—that create requirements for mining firms to buy from local suppliers, hire locals, and stimulate technology transfer—with investing in the right institutional and infrastructural environment, such as investments into key public goods (such as transport and energy), simplifying regulations, ensuring transparent governance, and investing in underlying drivers of firm growth. This approach is harder, but for many mineral-rich countries—it’s the only one with a shot at development.

Figure 2: Share of global mineral reserves in Africa for clean energy technologies

Extracting critical minerals responsibly

Critical minerals power clean technologies, but their extraction is anything but clean. In Zambia, an acid spill from a copper mine contaminated a major river. Across the continent, deforestation, water contamination, and unsafe waste management are too often tolerated or ignored. These damages are usually local. 

Most of the benefits, meanwhile, flow outward—to electric cars in Europe and processing factories in Asia. Left unchecked, such environmental degradation can lead to social unrest, policy reversals, and supply chain disruptions. As climate impacts accelerate—floods, droughts, extreme heat—the very regions extracting the minerals to fight climate change may become the most vulnerable to its effects. 

Pushing for green industrial policies can help by expanding the focus from what’s extracted to also how. This includes supporting renewable energy, cleaner mining technologies, and sensible environment regulations. It means aligning public incentives—tax breaks, credit schemes, trade facilitation—with core outcomes like job creation, emissions reductions, and greater economic resilience. Some companies are already moving in this direction. First Quantum Minerals plans to power its Kansanshi mine in Zambia with a 430 MW solar and wind project.

Reducing vulnerabilities in critical minerals trade

Critical mineral supply chains are highly vulnerable. These minerals are often mined in one country, refined in another, and used in a third—making disruptions inevitable. For instance, most cobalt comes from the Democratic Republic of Congo. Most refining happens in China. One disruption—a trade dispute, a port closure, a political crisis—and the entire chain shudders. 

Resilience requires more than rhetoric. It means investing in processing capacity beyond traditional hubs, diversifying logistics routes, and building transparent, long-term partnerships between producer and importing countries. Building shared regional infrastructure and processing hubs could be particularly helpful, such as the Lobito Corridor, which aims to link inland producers to ports, improving trade access and attracting investment. 

Figure 3: Share of processing volume by country for selected minerals, 2019

The IGC is working with governments to identify bottlenecks and unlock reforms. This includes building data systems for better decision-making, such as through the Zambia Evidence Lab, and expanding research into supply chain dynamics and environmental risks. For example, through a collaboration with the Zambia Revenue Authority, the IGC has used VAT and import data to map mining supply chains. Another ongoing IGC project examines the environmental and public health risks of copper mining in the Zambian Copperbelt. 

Critical minerals intersect with climate ambition, economic opportunity, and geopolitical complexity. If we continue as we are, we risk repeating the past—extracting minerals without building anything lasting. But if we diagnose the system honestly—its frictions and incentives—there is still time to do things differently.