Highlights

• University of Witwatersrand study forecasts 60-80% increases in African critical minerals production costs by 2055, driven by energy prices, labor dynamics, and capital investment needs across cobalt, copper, platinum, and zinc sectors.
• Mine-site operational costs—especially energy, labor, and consumables—account for over 70% of total production expenses, with rising costs threatening Africa's competitive advantage despite superior ore grades.
• Without strategic interventions in energy stabilization, local beneficiation, and processing capacity, Africa risks deepening dependence on external processors like China while capturing less value from its own resources.

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A new open-access study in Resources Policy (January 2026) by Mulundumina Shimaponda-Nawa (opens in a new tab) and Glen T. Nwaila (opens in a new tab) both affiliated with African Research Centre for Ore Systems Science (CORES), School of Geosciences, University of the Witwatersrand and University (opens in a new tab) of Zambia, School of Engineering, Department of Electrical and Electronics (opens in a new tab), provides one of the most detailed cost assessments to date of Africa’s critical minerals sector. Analyzing cobalt, copper, platinum, and zinc over a 24-year period (2000–2023), theauthors find that while Africa remains globally competitive—oftenbenefiting from higher ore grades—production costs are on a sustained upward trajectory, driven primarily by energy prices, labor dynamics, and rising capital and technology investment. Using historical cost trends, the study projects cost increases of roughly 60–80% by 2055, raising important questions about long-term competitiveness, energy security, and investment strategy.

How the Study Was Done

The researchers compiled long-run production and cost data from authoritative sources, including S&P Global and the US Geological Survey, and applied well-established time-series forecasting models (ARIMA, SARIMA, and Holt variants). Rather than assuming future policy or geopolitical shifts, the models extend historical cost patterns forward, providing statistically grounded estimates of where mine-site and total production costs may trend if past dynamics persist. Costs are disaggregated into mine-site operations (labour, energy, consumables) and depreciation, clarifying which factors drive inflation.

What the Data Show

Africa remains competitive—but unevenly.

Cobalt and platinum benefit from high-grade deposits, particularly in the Democratic Republic of Congo and South Africa, while copper and zinc face higher costs linked to deeper mining, energy intensity, and logistics.

Mine-site costs dominate.

Across all four commodities, mine-site costs—especially labor, electricity, fuel, and miscellaneous operational expenses—often exceed 70% of total production costs, with depreciation from aging infrastructure as the next largest contributor.

Costs are rising structurally, not cyclically.

Forecasts indicate:

• Platinum: +70–80% by 2055
• Cobalt & copper: +60–65%
• Zinc: up to ~60%

These increases reflect long-term pressures—energy volatility, mechanisation, deeper orebodies, and environmental compliance—rather than short-term shocks.

Why This Matters for Rare Earths and Global Processing Power (REEx Analysis)

Although the paper focuses on cobalt, copper, platinum, and zinc—not rare earths directly—the implications extend to the broader critical minerals balance of power. Africa supplies vast volumes of upstream material, yet most value is still captured downstream, where China dominates processing, refining, and advanced manufacturing.

So, according to Rare Earth Exchanges™ review of this work,  rising African production costs, without parallel expansion of local beneficiation and processing, risk reinforcing this asymmetry. China’s integrated system—combining energy control, processing scale, and state-backed infrastructure—can absorb cost shocks more effectively than fragmented producer systems.

Policy Implications Highlighted

The authors point to clear intervention priorities:

• Energy reform: Stabilizing electricity supply and integrating renewables near mine sites
• Skills and automation: Pairing mechanisation with workforce development
• Beneficiation: Capturing more value locally to offset rising extraction costs
• Data-driven planning: Using long-term cost forecasts rather than short price cycles

Limitations

This is a statistical forecasting study, not a scenario-based or geopolitical model. It does not explicitly incorporate inflation regimes, exchange rates, carbon pricing, or future policy reforms. Forecasts beyond roughly 10–15 years should therefore be treated as trend envelopes, not precise predictions. Nonetheless, consistency across models supports the central conclusion: cost pressure is real, persistent, and rising.

The Bottom Line

Africa remains indispensable to global critical minerals supply—but cheap extraction can no longer be assumed. Without decisive action on energy, beneficiation, and industrial policy, rising costs may deepen reliance on external processors. For investors and policymakers, the message is clear: future competitiveness will depend as much on systems and strategy as on geology.

Citation: Shimaponda-Nawa, M., & Nwaila, G. T. (2026). Analysis of the production cost structure and future prospects of Africa's critical minerals. Resources Policy, 112, 105781. https://doi.org/10.1016/j.resourpol.2025.105781 (opens in a new tab)

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