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Minerals have evolved to become the foundational currency of geopolitics—the essential gatekeepers of energy sovereignty, computational superiority, and industrial innovation. Armed with this currency, mineral-rich  African nations have  unprecedented leverage, which they are testing with renewed assertiveness.

The end of ‘Dig and Ship’

Across Africa, governments are increasingly mandating domestic processing and refining, viewing local value addition as essential to economic progress and raw exports as a betrayal of national interests.

Rohitesh Dhawan, former head of the International Council on Mining and Metals, provides a much-needed reality check. Speaking on CNBC Africa earlier this year, he noted: “I am 100% on board with the idea that the benefits of minerals under African ground should be maximally felt by Africans. What I don’t agree with is that the best way to do that is to move further down the value chain.” 

Dhawan’s perspective highlights the stark economic realities of midstream processing—such as copper smelting and bauxite refining—which demand massive scale, consume vast amounts of energy, and operate on razor-thin margins.

Insisting on local beneficiation to dismantle historical extraction patterns carries undeniable moral weight. If you don’t force the demand, the power lines don’t get built. That argument has teeth as Ha-Joon Chang and Alice Amsden established in their studies of South Korean industrial policy, showing that if state planners wait for a commercial grid to materialise before building steel mills, neither gets built. But demanding a standalone smelter inside every border overlooks how the market works. As Dhawan notes, South Africa has 66 ferrochrome smelters, but only 11 are running. His take on building more capacity? “We’re not even operating the things we have now.”

One strategy does not fit every resource

Different minerals carry entirely different economic chemistries. Lumping them together under a generic “local value addition” banner is lazy policymaking. Gold doesn’t require an eight-hundred-megawatt furnace to turn a profit. A compact domestic refinery tied directly to a central bank vault can buy raw doré from artisanal diggers in local currency, refine it to 99.5 percent purity in forty-eight hours, and stabilise the national exchange rate. For bulk minerals like copper and iron ore, the maths is brutal. Small-scale domestic processing can be financial suicide. 

Refining is a commodity. Ecosystems are capital and value sovereignty 

Fixating solely on refining obscures where true industrial independence and value sovereignty reside. In most cases, real value lies in the foundational operational supply chain: casting forged steel grinding balls, compounding xanthate chemical reagents for flotation circuits, vulcanising conveyor belts, and manufacturing high-pressure slurry pump impellers that require regular replacement. As Australia’s experience with mining equipment, technology, and services demonstrates, building a robust domestic supply network creates up to ten times more skilled technical employment than a single automated furnace room.

For neighbouring states, regional volume aggregation offers a viable pathway to transform downstream processing from a high-risk gamble into a sustainable enterprise. While precedents remain scarce, Aliko Dangote’s vision for a regional oil refinery in East Africa—where neighbouring states hold equity—presents a useful blueprint for overcoming scale constraints and aligning economic incentives. By replacing zero-sum competition with shared ownership, African nations can turn borders into integrated industrial corridors, capturing long-term value and advancing true energy and industrial sovereignty.

About the Author

Marcus Courage is the CEO of Africa Practice and an Ambassador for the Investing in African Mining Indaba. He has over twenty years of experience supporting policy-makers and investors to co-create solutions that address complex business and development challenges.