Africa's wealth of vital raw materials is undeniable. From copper and cobalt beneath Congolese soil to gold and lithium in Zimbabwe and the gold mines of Ghana, the continent holds enormous potential to meet the future global demand for critical resources. Despite these promising prospects, we at Commodity Capital AG have made a deliberate decision: We currently invest in mining projects on the African continent only under the strictest conditions and requirements.
This decision is neither ideologically motivated nor a sign that we underestimate Africa’s potential. On the contrary, we are convinced of the long-term importance of African markets. But after years of experience, careful data analysis, and personal on-site inspections, we have come to the conclusion that—for now—the risks, whether political, logistical, or ethical, often outweigh the opportunities. Here’s why:
Let’s start with the political situation. Mining requires reliability. Investors must be able to trust that laws will not change overnight, that permits will not be revoked in the middle of a project, and that conflicts will not bring operations to a halt. Unfortunately, these guarantees are not present in most of the resource-rich countries on the continent. Fluctuating regulations, political instability, and local unrest are recurring issues that can jeopardize even the best-laid plans.
But political risk is only the beginning. The physical infrastructure necessary for large-scale mining—roads, railways, power supply—is often inadequately developed. Without reliable transport routes and energy supply, costs rise sharply. These challenges cannot simply be solved with money; they require time, stable governance, and long-term state capacity for action.
In addition, there are ethical considerations. We cannot ignore the environmental destruction and human rights issues that widely burden the African mining sector. The use of dangerous chemicals, unsafe working conditions, and toxic wastewater are well documented. Beyond environmental risks, child labor and modern slavery are still alarmingly common in Africa. These challenges are not only humanitarian in nature; they also represent significant investment risks. Damage to reputation, protests, and government countermeasures can endanger even technically well-designed projects.
Of course, there are initiatives aimed at addressing these problems. Certification programs like IRMA and the OECD Due Diligence Guidelines are steps in the right direction. Some countries—such as Botswana and Namibia—have already made significant progress in governance, transparency, and environmental protection. We explicitly acknowledge these successes and are therefore taking a closer look at one or two projects. However, isolated advances cannot yet offset the overall systemic fragility in large parts of Africa.
In contrast stand rule-of-law countries like Canada and Australia, where law enforcement is stable, approval processes are transparent, and environmental standards are strict. For investors committed to sustainability—not just profit—such frameworks are more compatible with a long-term strategy and ethical responsibility.
To be clear: We are not ruling out future investments in Africa. Quite the opposite: we are closely monitoring current developments and are hopeful for positive changes. But responsible investing also means knowing when to say “no”—and why. And until a more reliable foundation is in place, we will remain on the sidelines—not out of fear, but out of conviction.
Below is a link to an informative video that vividly illustrates the ethical challenges in the African mining sector: