JOHANNESBURG (miningweeky.com) – With the world's energy transition accelerating and nations scrambling to secure resilient supply chains, Africa has what the world needs.

In fact, the continent is seen to be in pole position to contribute to twenty-first-century industrial transition.

This is because its minerals are not only essential for clean electrification and digitisation but are also becoming increasingly valuable owing to supply bottlenecks and rising geopolitical pressure.

With affordable energy, Africa’s growth potential can be realised and its transformation potential can be made to extend far beyond traditional mining economics, owing its disproportionate ownership of the world’s critical minerals.

"We're talking about a fundamental shift from resource extraction to industrial transformation – one that can create high-quality jobs, build technological capabilities, and position African nations as essential partners in global clean energy and digital infrastructure development," BCG project leader Lindokuhle Shongwe explained in an online communication session covered by Mining Weekly.

Interestingly, given its mineral diversity and existing industrial infrastructure, South Africa emerges particularly well on a continent that is increasingly finding itself at the centre of things.

For the first time in generations, Africa has the leverage to shape – not just serve – the next global industrial era, BCG Johannesburg MD and partner Tycho Moencks has pointed out.

Key to these comments are two comprehensive BCG studies; the first unpacks Africa’s energy status and the second spells out Africa's compelling critical mineral opportunity.

Strongly emphasised is the need for Africa to act together, to act credibly and to act now, amid BCG calculating that for every $1-billion invested in mining and processing activities, 3 000 to 6 000 direct, indirect and induced jobs can be created, while $210-million to $280-million a year is contributed to GDP in steady state – but a sufficient affordable energy supply is key.

Additionally, such investments would generate $70-million to $100-million in yearly incremental government revenue and drive $100-million in regional infrastructure development.

On the financing side, BCG reports a level of innovation, particularly when it comes to blended finance instruments and the coordination of multiple funders behind those blended finance instruments, with development finance institutions (DFIs) assisting.

“It's by no means perfect, but we do see some early signals where you get different capital stacks for different parts of the project life cycle, basically a project that is a bit more grant funded at the early stages to allow for technical assistance and feasibility studies to be done, and then more commercially loaded as you get closer towards bankable feasibility, and some of the DFIs playing in the background, helping with the tariff subsidisation to help with initial catalytic capital to get the project off the ground,” BCG Johannesburg MD and partner Kesh Mudaly outlined to the online audience.

The rubber really hits the road on the details and being seen are the early signs of innovative approaches being taken in Africa to make finance flow.

Noted by BCG is South Africa’s world-leading position in platinum group metals, combined with substantial reserves of manganese, chromium, and vanadium, and its potential as an anchor of regional value chains and a natural hub for attracting downstream manufacturing investments in battery technologies, renewable-energy components, and advanced materials processing.

Reiterated is that “there are no income-rich, energy-poor countries in the world” and pointed out by the consultancy is that Africa faces a major energy access gap and needs to achieve universal energy access amid more than 50% of new connections predicted to come from decentralised renewables.

Moreover, catalytic funding is critical, government reforms are key, private sector involvement is vital, and the time to act is now to unlock up to $500-billion in GDP and millions of jobs.

Described as unfortunate is the remaining heavy reliance of African countries on upstream extraction of legacy materials and failure to advance the development of future-facing reserves or to move down the value chain.

This is said to result from a number of interlocking structural barriers, including a lack of water, power, road and port infrastructure, regulatory fragmentation and uncertainty, capital scarcity, and a shortage of specialised skills. Concerning, too, are environmental, social and governance issues, including those related to artisanal and small-scale mining.

As a result, finished goods, high-quality jobs, and technological capabilities are imported, and opportunity is exported.

But positive is the leverage created by growing critical mineral demand, which is opening opportunities for Africa to attract long-term capital through offtake-backed investments and concessional finance.

Emerging is the opportunity to negotiate stronger terms on infrastructure, technology transfer, and local content; and partner globally to build capabilities, advance traceability, and share in downstream value.