Africa has been attracting more diverse and innovative capital flows over recent years. The US, Europe, the Middle East, Japan, and even India are all crowding in, while China maintains its already well-established presence. Institutions like the US’s Development Finance Corporation (DFC), the UAE’s International Holdings Resources (IHR), or Japan’s JOGMEC have become leading actors in critical minerals financing. At the same time, African-based investment funds and state-owned development institutions are also becoming more involved in mining, mostly by taking leading equity positions in strategic projects. Leading African banks are also starting to join the party and take greater risks. Large royalty and streaming companies with predominantly Americas-focused portfolios are growing their exposure to Africa with large tickets.

When it comes to investing in gold, a metal more precious than it has ever been, both Australian and Canadian mining stocks, which account for the majority of listings in Africa, are outperforming the gold price. Mining companies have had the chance to repair and consolidate their balance sheets, gold miners in Africa are prioritizing sustainable growth and accruing larger reserves over speculative growth. A bull market typically triggers more M&A activity, which in itself adds valuation floors, but with assets already quite pricey, cash-rich producers are highly selective. Capital growth projects for many African gold producers remain focused on existing assets that they seek to develop into production. Sitting on the frontlines of finding more gold in Africa, every junior company that has found gold, whether proved reserves or inferred resources. benefits to some degree from the price upswing. Drilling activity across the continent is intense, supported by oversubscribed equity placements.

In the critical minerals space, commodity fundamentals are overlaid with isolationist, protectionist policies. With important producers of critical minerals, like Russia for PGMs, nickel, bauxite, titanium, potash, and tungsten, and China, which dominates not only the production of REEs, graphite, tungsten, and lithium, but also has a near-monopoly on the refining of cobalt, graphite, and REEs, either sanctioned or restricted, attention turns to Africa: copper, cobalt, nickel, tin, tungsten, tantalum, iron ore, lithium, graphite, REEs, manganese, PGMs, silver, and others all form part of Africa’s vast geology. However, current production capacity is limited, and processing capacity is negligible. For these materials, Africa is by default a price-taker.

Which African countries will benefit from these dynamics, whether the gold boom or the interventionist interests of both West and East, depends greatly on the level of stability. Perhaps not unrelated to the gold boom, West Africa has also seen a boom in political instability and insurgent violence since 2020. A wave of coup d’états in Mali, Guinea, Niger and Gabon, as well as failed coup attempts in Sierra Leone and Guinea-Bissau between 2020 and 2024, has wrapped the affected Birimian belt into a “coup belt.”

New investors will need to tread carefully as they step onto these shifting sands.