The race for minerals and metals crucial for the global energy transition is intensifying—and is increasing pressure on producing countries, including those in Africa.
The International Energy Agency expects between $180 billion and $220 billion to be invested in the mining of critical minerals between 2022 and 2030, with about 10 percent of this investment slated for Africa. Countries including the United States, Europe, China, South Korea, Saudi Arabia, the United Arab Emirates, and others are prioritizing supply-chain security with regard to the minerals and metals needed for the global energy transition and for defense industrial applications. The African continent is an important supplier of these commodities.
As this race for minerals and metals critical for the energy transition heats up amid a turbulent geopolitical environment, both companies and governments must not abandon environmental, social, and governance principles (ESG) with respect to Africa.
African countries are increasingly demanding that mining operations deliver more benefits for government revenues and local populations. Toward that aim, countries have adopted mining codes that assert national sovereignty over these minerals, implemented export bans on unprocessed minerals, and unveiled policy strategies to support domestic value-adding processes. In particular, African countries—including Ghana, Nigeria, Namibia, Botswana, Mali, Guinea, and Niger—are increasingly implementing policies of national preference in the mining sector, with the aim of increasing the share of local participation. Others, such as Tanzania, have banned the export of non-value-added minerals. In 2021, the Democratic Republic of the Congo (DRC) launched a review of the mining contracts signed by previous leadership with Chinese investors based on concerns that Chinese promises to build roads, hospitals, universities, and housing had not been fully realized.
However, significant portions of the mining industry are still unregulated. For example, the perspectives and interests of artisanal miners are not always fully captured in mining codes, which often have weak provisions on workers’ rights, equal working conditions, and wages.
International mining companies, per an EY survey, considered environmental, social, and governance (ESG) factors to be the top risk to their business in 2024. They placed ESG as a top risk ahead of capital constraints, conflict, or even cyberattacks.
Mining companies usually face risk (even in the West, but particularly in fragile contexts) due to long lead times, volatility in commodity prices, policy uncertainty, and security challenges. However, the global map of minerals that hold strategic importance shows that mining activities for these commodities usually take place in countries where ESG remains a challenge, such as China, Russia, the DRC, Peru, Zimbabwe, South Africa, Turkey, and India. For example, the DRC is home to about half of the world’s cobalt reserves; meanwhile, more than three-quarters of the world’s platinum reserves are located in South Africa. Many rare earths, including lithium, nickel, and cobalt, are refined in China. For countries that mine and export minerals, especially the ones in Africa, such activities have not generally translated into sustained economic growth and broader improvements in human well-being. Instead, host communities of mining projects have often had to deal with environmental pollution, health challenges, and stagnant incomes.
Corporations increasingly turned to impact investment, especially soon following the launches of the United Nations Millennium Development Goals in 2000 and the Sustainable Development Goals in 2015. And over time, governments, institutional investors, and asset managers have set up various systems through which companies report their impact on the environment and on societies. For example, the European Union’s Corporate Sustainability Reporting Directive requires companies to explain the impacts of their business strategies. In the United States, the Securities and Exchange Commission requires publicly listed companies to report climate-related information. Last year, the Global Reporting Initiative, founded in 1997 in order to promote standardized ESG reporting, launched a new mining-sector reporting standard.
But recently, the momentum for recognizing and adopting ESG principles at a global level has slowed down. Reports now abound of companies, investment banks, and other private-sector actors setting aside their ESG commitments in the face of economic recession or political instability. Some are discontinuing or disbanding their ESG divisions altogether. Governments too are abandoning commitments to social and environmental sustainability principles. While these are setbacks to the wider global ESG agenda, this is a worrying trend and could be detrimental if it were to extend deeply into the mining industry.
There have certainly been shifts in how stakeholders in the mining industry have approached ESG. According to the mining companies surveyed by EY last year, the three ESG risks to which investors paid the most attention were local community impact (64 percent), waste management (55 percent), and water stewardship (51 percent). In 2025, EY notes, miners have turned their focus more toward the environmental stewardship component of ESG, reporting that waste management (44 percent), water stewardship (31 percent), and climate change (31 percent) would attract the most scrutiny from investors. The category that includes local community impact dropped from the third top risk to the fifth. And it seems there was a deprioritization of the governance component of ESG among mining companies and leaders, which EY says raises “alarm bells.”
Nevertheless, there are mining companies bucking the trend in the sense that they still prioritize and recognize ESG; that is commendable. It will be important for them to continue to stay the course knowing how much work has gone into securing the social license to operate in difficult jurisdictions. The progress made over the past decades cannot be jettisoned. If mining companies resist the global trend that is turning away from ESG, they can even help nudge their home governments to commit more deeply to ESG principles.
To ensure that mistakes of the past are avoided, and Africa’s development is supported in this intensifying scramble for minerals critical to the energy transition, the West—both its governments and corporations—cannot afford to abandon ESG.
Zainab Usman is the director of the Africa Program at the Carnegie Endowment for International Peace.
Rama Yade is the senior director of the Atlantic Council’s Africa Center.
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Image: Plastic collection centre in the Hamdallaye district of Sikasso, Mali, 10 May 2017. - 27/03/2023 - Mali / Sikasso / Sikasso - Nicolas Remene / Le Pictorium.