The world says it wants a secure and diversified supply of critical minerals. It wants Africa's lithium for batteries, copper for grids, manganese for cathodes, and bauxite for aluminium-intensive technologies. But when the conversation moves from raw material supply to industrial capacity, the financing becomes thinner, shorter, and far more cautious. This is the contradiction at the centre of Africa's place in the energy transition: global markets want the continent's minerals, yet the financial architecture still does too little to help African countries capture more value beyond extraction.
Financing must move to the centre of the just-transition debate. Africa already supplies major shares of several minerals needed for clean-energy supply chains, yet it captures only a tiny share of the value generated from manufacturing clean-energy technologies and their components. This means, if the continent remains largely a source of ore and concentrate while others finance the processing, chemical conversion, component manufacturing, and technology platforms, then the transition may be green, but it will not be just.
The financing gap is visible in the wider energy economy. Africa is home to around one-fifth of the world's population but attracts only a small share of global energy investment and an even smaller share of global clean-energy spending. The cost of capital for energy projects in African countries remains far higher than in advanced economies and China. This matters because value addition is not just about a mine or a plant; it depends on the systems around them, including reliable electricity, transport, water, industrial inputs, skills, and long-term finance that can absorb risk before commercial returns are immediate.
Ghana offers one of the clearest examples of both the promise and the financing challenge. The country's long-standing ambition to build an integrated bauxite-to-aluminium industry is not irrational; Ghana has high-quality bauxite, an aluminum smelter through VALCO, and a political desire to retain more value at home. Recent Ghana-focused analysis suggests that a fully integrated aluminium industry could have a much larger impact on output and employment than mining alone. However, the same evidence shows that the economics depend on factors that are expensive to finance and difficult to coordinate, including competitively priced power under a long-term bulk supply arrangement, major rail investments, access to ports, and very large upfront capital expenditure.
The missing link is not ambition, but rather bankable industrial finance on appropriate terms. This is a lesson with continental relevance. Ghana's aluminium ambitions show that mineral value addition is not a side project that can be bolted onto extraction later; it is an integrated industrial undertaking. If power is too expensive, if rail is missing, if industrial inputs are imported at high cost, or if the financing tenor is too short, the refinery becomes uncompetitive before it starts. NRGI has warned that Ghana's aluminium value chain ambitions could absorb almost all the country's hydropower capacity unless new competitively priced electricity is brought onstream.
This is precisely the kind of structural problem that private investors alone are unlikely to solve.
Ghana's lithium debate shows the same problem from another angle. Public support for domestic lithium refining is understandable; many Ghanaians do not want the country to discover a transition mineral only to repeat the old pattern of exporting raw material and importing value-added products. However, recent analysis by the Natural Resource Governance Institute shows that a refinery built in the next few years would face limited feedstock, higher costs than major competitors, especially in China, and uncertain demand conditions outside China. Under one medium-price scenario, Ghana could earn at least USD 500 million less from its current lithium reserves by refining domestically than by exporting concentrate, and the refinery would likely create no more than about 200 direct jobs once operational.
This finding should not be read as an argument against value addition, but rather as an argument against forcing value addition before the financing and market conditions exist. Ghana's lithium case is really a warning about how the wrong financing structure can turn a popular industrial idea into a fiscal burden. NRGI's modelling shows that if a refinery pays the market price for feedstock, it makes a loss; if it pays below-market prices, the government effectively subsidises the refinery through lower revenue from the mine. The state could also step in with grants, cheap loans, subsidised energy or direct ownership, but that would still move risk onto the public balance sheet.
Climate finance cannot stop at the mine gate. For Africa, it must also finance the industrial future beyond it. Africa's climate finance needs to shift from focusing solely on funding renewable energy projects to supporting the industrial capacity required to process and manufacture clean-energy technologies. This requires a more nuanced approach to climate finance, one that recognises the complexity of Africa's energy landscape and the need for a more integrated approach to value addition.
The International Energy Agency's analysis of copper refining highlights the challenge facing Africa. Projects in Africa can cost more than four times as much upfront as comparable projects elsewhere, while energy costs are significantly higher and account for a very large share of production costs. This is not just a matter of funding; it is about creating an environment that supports industrial production.
Climate finance, development finance, and private capital must be reoriented to support Africa's industrial capacity. This requires creating fit-for-purpose financing windows for mineral value addition and enabling infrastructure, with longer tenors, concessional tranches, guarantees, foreign-exchange risk mitigation, and serious project-preparation support. The agenda should also go beyond isolated national plants; many African countries do not individually have enough feedstock, infrastructure, or market scale to make every stage of processing viable. Finance should therefore support integrated project models and regional industrial corridors where the economics justify them.
In its analysis of Ghana's aluminium ambitions, NRGI found that a fully integrated aluminium industry could have a much larger impact on output and employment than mining alone. However, the same evidence shows that the economics depend on factors that are expensive to finance and difficult to coordinate: competitively priced power under a long-term bulk supply arrangement, major rail investments, access to ports, and very large upfront capital expenditure. This is a lesson with continental relevance. Ghana's aluminium ambitions show that mineral value addition is not a side project that can be bolted onto extraction later; it is an integrated industrial undertaking.
Ghana's experience shows both why this is difficult and why it matters. Where the infrastructure is missing, the capital is too expensive, and the risks are loaded onto the public balance sheet, value addition will stall or become fiscally damaging. But where finance is patient, infrastructure is financed as part of the industrial project, and public safeguards are built in from the start, the just-transition promise becomes more credible.
The International Energy Agency has shown that while mining in parts of Africa may be cost-competitive, the capital and operating costs of refining are often much higher because energy, logistics, and industrial inputs are more expensive or less reliable. In its analysis of copper refining, the IEA found that projects in Africa can cost more than four times as much upfront as comparable projects elsewhere, while energy costs are significantly higher and account for a very large share of production costs.
The Africa Group of Negotiators has an important role to play in pushing for a more integrated approach to climate finance. In global forums, AGN should insist on four simple points. First, Africa's critical minerals agenda must be treated as a just-transition issue, not merely a supply-security issue for importing countries. Second, climate and development finance should support the industrial foundations of value addition, not only extraction. Third, public de-risking must come with public safeguards so that African states do not carry the downside while others capture the upside.
Fourth, concessional and blended finance should help create commercially credible first movers, while leaving room for governments to course-correct where projects do not yet make economic sense.
Africa does not need another commodity boom that leaves behind a few pits, a few ports, and a long list of missed opportunities. What Africa needs is finance that helps convert mineral endowment into productive capability. Ghana's experience shows both why this is difficult and why it matters. Where the infrastructure is missing, the capital is too expensive, and the risks are loaded onto the public balance sheet, value addition will stall or become fiscally damaging. But where finance is patient, infrastructure is financed as part of the industrial project, and public safeguards are built in from the start, the just-transition promise becomes more credible.