Contributed by In On Africa (IOA)
Analysis in brief: African nations are rethinking how value is captured from the energy supplies and minerals contained within their borders. Climate pressure, energy transition demands and geopolitical competitions are driving the opportunities to exert greater control over natural resources and ensure higher financial returns for finite mineral resources.
For decades, African policymakers have put forward the prospect of a continental interest group to control pricing of natural resources coming out of Africa, following the example of oil-producing countries who determine world oil prices through the Organization of Petroleum Exporting Countries. The main obstacle to the acceptance of such a body has been the fear of loss of national sovereignty over countries’ most valuable economic assets.
Now, greater control over the financial rewards of resource exploitation is being realised but on an individual country basis. Resources under consideration go beyond what is produced in mines and include energy products. 2025 saw a wave of national laws passed by African parliaments and endorsed by the continent’s leaders, and it was also a prodigious year for treaties with foreign powers who once controlled the value of Africa’s natural resources and determined prices.
Creating a collection of best practices from laws governing extractives, African nations are securing better prices for natural resources by means like placing bans on the exportation of raw exports, mandating local processing of ores and revising mining contracts with foreign firms to increase state ownership. This is being done at a time when the seller has the upper hand. High global demand for critical minerals like cobalt, copper and lithium allow their owners greater leverage in negotiations.
Coupled with contract reform, nations are also seeking to create local, sustainable value chains to develop value-added industries. Governments are eager to expand their industrial sectors by utilising local national resources. Infrastructure, tax credits for start-up firms and contracting expertise for skills transfer to local entrepreneurs are all essential. These measures help ensure that the economic benefits of mineral extraction do not end when resources leave the mines. They also support efforts to secure additional financial returns from liquefied natural gas and oil once they are pumped from deposits under the land and sea. Making value-added products have become governments’ economic imperatives to maximise value from natural resources.
This should not suggest that regional and continental bodies cannot assist with national goals. The African Continental Free Trade Area can be utilised to harmonise policies and create stronger bargaining positions. Another example of how multi-lateral policy is assisting signatory countries can be seen in the way African Union member states have created the Africa Mining Vision as an action plan to guide regulations and innovations aimed at closing the gap between Africa’s mining wealth and pervasive poverty, which could be mitigated through such resources. Another example is the Extractive Industries Transparency Initiative, which seeks global standards in transparency for mining sectors, is being implemented by Ghana, Niger and Nigeria to ensure better reporting of contracts and revenue, reducing corruption and improving profitability.
In the energy sector, the trend towards maximising financial returns for resource-exporting countries is being managed through new or renegotiated agreements with foreign buyers. Local content requirements figure prominently in these new agreements. Guided by national laws, firms harvesting natural resources are required to employ local workers, use local suppliers, and if partnerships in a company are sought or equities in a company are listed on a stock exchange, opportunities to buy or get involved must be made available to local investors. This same emphasis is applied by nations seeking to develop value-added industries they deem worthy of promoting for national economic growth by utilising sovereign wealth funds to finance long-term development projects.
Maximising national benefits from mineral resources
Creating a new resources paradigm that maximises benefits for African host countries will require national legislation to enforce these policies. When national laws are enacted to enforce resource-governance policies, they can fundamentally reshape how resources are managed. Zambia offers an example. The birthstone of February is amethyst, and Zambia is the world’s top producer of the purple gem. Zambia excavates around 1,000 tonnes of amethyst a year to meet global demand, and for decades, the stones were exported raw to be cut and made into jewellery overseas. Zambia’s value-addition policies have supported the growth of a domestic gemstone industry. Several Zambian ‘mine-to-market’ companies now mine, cut, polish and produce amethyst jewellery, including Jagoda Gems, Jewel of Africa, Mutinta Jewellery, Mwezi Blu and Virtu Gem. These firms are aided by the 2025 law the Local Content Statutory Instrument, which mandates domestic processing of raw material before they are exported.
On the other hand, countries like Zimbabwe have neglected this important legislative step. In the expectation that local companies will create value from raw minerals, some countries have frozen the export of unprocessed resources. This has been applied particularly to rare earth elements and minerals,
such as cobalt and lithium, which are in high demand for electronics manufacturing. However, these export freezes have been imposed without the legislative framework needed to support the growth of value-added industries.
More broadly, Zambia has reformed its mining legal framework to maximise the value of its minerals with the Minerals Regulations Commission Act of 2024. This centralised commission exists to improve efficiency in regulating large-scale mining and gemstone extraction. The Local Content Regulations of 2025 mandates that companies with at least 25% Zambian shareholding qualify for preference in the government supply chain, which is also an attempt to expand the local share of mineral wealth. The local shareholding requirement rises to 40% by the firm’s fifth year of extraction operations. Industry stability was the purpose of new higher taxes on the transfer of mining rights. In addition, Zambia’s National Critical Minerals Strategy is designed to promote state participation across the entire value chain – from exploration to processing.
Further south, South Africa has also promulgated laws that can be used as templates by countries seeking more value for their natural resources. The country led the continent early in the 21st century in terms of leveraging its mineral wealth with the passing of the Mineral and Petroleum Resources Development Act (MPRDA) of 2002. The Act designates government as the custodian of all mineral resources under the assumption that a democratically elected state will oversee equitable access to state resources, which would be advanced for national development and not merely personal or corporate profit. The MPRDA regulates who owns mines, where mining is allowed and how natural resources are used. More recently, the Critical Minerals and Metals Strategy (2025) was developed to transition South Africa from a raw material exporter to a value-adding supplier of clean technology manufactured from its own minerals.
As Africa’s leading industrial economy, South Africa had already developed supply chains and value-added industries for locally produced minerals when the MPRDA came into effect. However, more could still be done. The majority of the country’s people were historically excluded from participating in the economy as entrepreneurs and industrialists. To address this imbalance, a national mineral-processing system was needed to support the MPRDA’s societal and economic goals. Nearly a quarter century later, the 2025 Mining Resource Development Bill was introduced to advance local value-added processing by reforming administrative processes, such as licensing that had previously constrained entrepreneurship.
This reform trend is exemplified in Nigeria’s drive to end the ‘pit-to-port’ scenario that has long characterised the fate of its natural resources. The Nigerian beneficiation laws and policies enacted since 2024 halt the export of raw materials and suspends the issuing of new mining licenses until companies submit business plans, which demonstrate how they will undertake local processing as part of their production. The Nigerian Raw Materials Research and Development Council Bill of 2024, amended in 2025 and often referred to as the 30% Value Addition Bill, requires that at least 30% of raw minerals be processed, refined or be otherwise beneficiated by Nigerian firms. To assist small businesses in processing the minerals that they have access to, the law encourages investment in local processing plants by waiving import duties on machinery and equipment imported for mineral processing operations. Mining companies benefit from the law through provisions that expedite transfer of profits overseas tax-free.
A significant innovation in Nigeria’s resources law is its approach to informal mining by artisanal miners. These miners often operate at a subsistence level and lack the capital needed to invest in value-added activities. Under the new framework, artisanal miners are required to process 30% of the minerals they extract locally, and new mining licenses are conditional on demonstrating local value addition. To support compliance, the government has organised individual artisanal miners into co-operatives, helping them meet the new processing standards. The strategy aims to increase the mining sector’s contribution to GDP by expanding employment, boosting industrialisation and thus raising government revenue through taxes.
Beneficiation enhances the value of energy resources extraction
A strategic shift away from exporting raw energy resources – such as coal, natural gas and petroleum – has brought beneficiation to the forefront of African energy-sector regulations as governments seek to increase national revenue. Countries now want value addition, processing and manufacturing to take place locally. The regulations that have emerged frequently require that a percentage of goods and services for both fossil-fuel and renewable-energy projects be sourced locally. Companies must also specify the percentage of local ownership involved in energy projects.
In South Africa, the same laws that are propelling government’s goal of increasing local participation in the mining sector and increasing national revenues from minerals extraction are being applied to the energy sector to achieve the same results. The MPRDA law shifted ownership of mines to the state and allows the government to regulate who mines, where they mine and generally how natural resources are used. It is also applied to energy reserves, such as oil deposits, solar arrays and wind energy farms.
The South African energy industry’s beneficiation efforts are fostered by the Mineral and Petroleum Resources Development Amendment Bill (2025), which is the legal means to transform energy assets into higher-value products domestically. Nigeria is doing the same. The Nigerian Oil and Gas Industry Content Development Act creates a board empowered to require that energy projects must source 70% of their products and services locally by 2027. Kenya’s Local Content Bill (2025) requires that foreign investors in renewable energy projects source at least 60% of goods and services used in these endeavours to be sourced from Kenyan firms.
Mozambique’s mining legal framework, most notably the Mining Law 20 of 2014 and Regulation 31 of 2015, mandate local content by requiring holders of mining rights to prioritize Mozambican goods and services if prices are not more than 10% higher than imports. Foreign investors are required to partner with local firms and mandates public tenders for contracts exceeding US$900,000.
This requirement has motivated the completion of TotalEnergies’ liquefaction plants in Cabo Delgado Province. Halted in 2021 due to Islamic militant attacks on the infrastructure, that construction on the US$20 billion project would resume was announced in early February 2026. Security concerns further south have not inhibited the building or operations of an integrated processing facility in the Inhambane Province, the Central Processing Facility at Temane. Operated by the South African energy giant Sasol, the facility processes natural gas and manufactures light oil for the domestic market.
Mozambican law requires that a percentage of state revenue generated from mineral resources be allocated to the development of local communities. This spending aims to address the persistent anomaly of local communities remaining impoverished and undeveloped while valuable minerals are mined or pumped from their areas.
The Africa Mining Vision, adopted by African Union member states in 2009, was the pioneering developmental approach to mining on the continent. Its philosophy has taken hold: The exploitation of African natural resources must be prioritised to advance African economic and social growth. A flurry of national laws since 2024 – the enabling mechanisms that make realities of the Vision’s action plan – testifies to the belief that economic and societal advances can grow from a shared philosophy.
The critical points:
• African countries are adopting new legislation to increase the national benefits derived from mineral and energy resources, in line with the Africa Mining Vision
• By adding value to minerals before export, beneficiation is the cornerstone of Africa’s natural–resource reform agenda
• Value added industries are generating additional financial benefits from nations’ natural resources
Originally published at www.inonafrica.com
In On Africa (IOA) is a Johannesburg-based research and advisory firm offering data-driven insights across all 54 African countries. Through in-depth research, analysis, and strategy support, IOA empowers organizations seeking to understand Africa’s opportunities, risks, and long-term market trajectories.
