West Africa’s Critical Minerals Moment

Zach Martin

Welcome to The West Africa Desk. I'm Zach Martin, and this is the show where we follow the economy, the critical minerals, the rare earths, the trade routes, and the politics that make West Africa a long horizon position. We're heard on KMKT, The Home of IR Hub Radio, and we're glad you're with us. I'm here, as always, with Emily Martin. Before we go any further, a few things up front. This series is sponsored by Leone Assets, at leoneasset.com, a U.S. company with operations in Freetown, Sierra Leone, working across infrastructure, rare earth and mineral exploration, agriculture, and land advisory in West Africa. And please hear this clearly: this is a sponsored informational discussion. Nothing we say is investment advice, and nothing here is an offer to buy or sell any security. Think of it as a guided walk through a landscape, not a map with an X on it.

Emily Martin

Thank you, Zach, and I'd underline that last point, because the landscape we're walking today is a large one. This is not a headlines roundup. We're not going to race through ten stories in sixty minutes. We want to stay with a few difficult ideas long enough that you can follow them from the ground up. And I'll say, to the listener, that if you're someone who allocates capital, advises people who do, or just wants to understand why West Africa keeps showing up in conversations in Washington, Abu Dhabi, Seoul, and Brussels, this hour is built for you.

Zach Martin

Let's set the table by looking back a little. In an earlier episode, called Why West Africa Is Betting on Mineral Refining, we got into the weeds on the microeconomics. We looked at the Natural Resource Governance Institute's cost modeling for the Ewoyaa lithium project in Ghana, and we looked at Guinea's ultimatum to Emirates Global Aluminium. That was the single project view. How much does a domestic refinery cost, who pays, and what happens when a government says build it or lose the concession. Today we zoom out. Way out. Because those individual fights are happening inside something much bigger, and if you only watch the single project, you can miss the weather system it's sitting in.

Emily Martin

That's a good way to put it. A refinery argument in Conakry or Accra feels local, and in one sense it is. But the reason governments in the region feel they can push, and the reason outside capital is willing to be pushed, has a great deal to do with a realignment of how the world wants to source the minerals that sit inside batteries, magnets, chips, and defense systems. So I want to start with one concrete day, because it tells you a lot. February 4, 2026, in Washington. The U.S. State Department hosted what it called the 2026 Critical Minerals Ministerial.

Zach Martin

And the scale of the guest list is a detail worth sitting on. According to the State Department fact sheet, Secretary of State Marco Rubio, joined by Vice President JD Vance, Treasury Secretary Scott Bessent, Interior Secretary Doug Burgum, Energy Secretary Chris Wright, and U.S. Trade Representative Jamieson Greer, hosted representatives of 54 countries and the European Commission. That included 43 foreign and other ministers. Now, I come from a broadcasting background, and I've seen plenty of conferences that fill a room with name tags. What caught my attention is the list of what happened in one day. The United States signed new bilateral critical minerals frameworks or memorandums of understanding, announced financing opportunities, and launched a new forum. That is a lot of paper for a single Wednesday.

Emily Martin

And the West African detail matters for us. Among the attending delegations were Guinea and Sierra Leone. The State Department says the United States signed eleven new bilateral frameworks or MOUs that day, with countries including Argentina, the Cook Islands, Ecuador, Guinea, Morocco, Paraguay, Peru, the Philippines, the United Arab Emirates, the United Kingdom, and Uzbekistan. So Guinea is on that signing list. Sierra Leone attended, though it is not among the eleven named signatories, and I'd like us to be careful there. We shouldn't tell a story in which every attendee left with a signed agreement. The fact sheet also says the U.S. signed ten other frameworks in the previous five months and had completed negotiations with seventeen other countries. So this is a pattern, a campaign, not a one day event.

Zach Martin

Let me offer an analogy, because I think people hear the word framework and their eyes glaze over. A memorandum of understanding is like a handshake at the trailhead. It tells you two parties intend to hike the same mountain. It does not carry the gear, build the hut, or pay for the guide. The State Department itself describes these frameworks as laying the groundwork for nations to collaborate on pricing challenges, spur development, create fair markets, close gaps in priority supply chains, and expand access to financing. Groundwork. That's the word. The question for anyone thinking long horizon is how much of the groundwork turns into actual ground, with a road, a power line, a processing plant, and a legal title that holds up.

Emily Martin

Yes, and that is the thread I want to pull through the whole hour. Paper versus operating assets. But first, let me give the listener the why. The U.S. fact sheet is quite direct about it. It says the market for critical minerals and rare earths is highly concentrated, and that concentration leaves it as a tool of political coercion and supply chain disruption. That's their language. And the International Energy Agency, in its Global Critical Minerals Outlook 2026, puts numbers on how that concern stopped being theoretical. It says 2025 was the year when the economic risks of highly concentrated supply chains materialised at scale.

Zach Martin

Walk us through the specifics, because I think the specifics are what make it stick.

Emily Martin

In April 2025, the Chinese government introduced major export controls on seven heavy rare earth elements. The IEA says the impacts across downstream industries were significant, and that some automakers had to reduce utilisation rates or temporarily halt operations. In October 2025, those controls were expanded, extending proposed restrictions to internationally made products containing rare earths sourced from China or produced with Chinese technologies. The expanded measures were suspended for one year, until November 2026, but the IEA's warning is that the vulnerabilities remain. If the full measures were implemented, it estimates about 6.5 trillion dollars per year of downstream production outside China could be put at risk, across automotive, high tech, defense, and energy. Separately, controls on battery supply chain chokepoints, including graphite anode materials, put over 300 billion dollars per year of downstream production at risk if battery grade graphite trade were fully disrupted.

Zach Martin

Those numbers are staggering, and here's what I find instructive. The IEA also points out that these minerals are a tiny share of the final product price. Critical minerals are around a quarter of battery cell costs, but only about three percent of the price of an average electric vehicle. Rare earths are about forty percent of the cost of a permanent magnet, but less than one percent of a vehicle's value. So you have a tiny line item that can stop an entire assembly line. It's like the small bolt on an airplane. It barely moves the price of the plane, but if you can't get it, nothing leaves the hangar.

Emily Martin

And that explains the urgency in the room on February 4. The U.S. says it is mobilizing, in its words, unprecedented resources, with more than 30 billion dollars in letters of interest, investments, loans, and other support over the past six months, in partnership with the private sector. I want to be careful, as we always are on this show, to separate what is reported from what is interpreted. That figure is the U.S. government's own characterization, in a document that also describes the effort as driven by America First values. It's a statement of intent and scale from the people doing it, and the useful question for us is what it means for a region like West Africa.

Zach Martin

So here's the shape of the next hour. First, the Washington architecture, the vehicles and the money, plus the Gulf capital that's circling. Second, the market reality from the IEA, the prices, the cost of building outside China, and what the agency calls a mineral security premium. Third, the Brookings framework, with its three big trade offs. And finally we land in West Africa itself, Sierra Leone's 2026 to 2031 national critical minerals strategy, and the regional policy shift in Guinea, Ghana, and Nigeria. I'd ask you to hold one coaching idea in your head the whole way. Long horizon positions are built the way fitness is built. Not by one heroic workout, but by discipline and small improvements that compound.

Emily Martin

Let's go into the architecture. The ministerial is the visible event, but underneath it are institutions with checkbooks, so let me name them. The State Department fact sheet announced the launch of FORGE, the Forum on Resource Geostrategic Engagement. Secretary Rubio described it as the successor to the Minerals Security Partnership, the earlier grouping. FORGE is chaired by the Republic of Korea through June, and the stated purpose is for partners to collaborate at both the policy level and the project level to advance diversified, resilient, and secure critical mineral supply chains.

Zach Martin

Now, I like to ask a simple pragmatic question of every new institution. What does it do on Monday morning? A forum can be a talk shop or it can be a pipeline. The fact sheet says the project level collaboration is intended, and it points to a task force. After the ministerial, Deputy Secretary Landau and Under Secretary Helberg convened a task force of mining industry leaders to advance priority projects. So there's at least an intention to connect the diplomacy to specific assets. We won't know how well that works for some time, and I'd caution listeners against assuming it will be smooth. Institutions get announced faster than they get operational.

Emily Martin

And I'd add that there's a second layer, the private sector. The fact sheet says governments alone cannot solve this, and it leans on something called Pax Silica, which it describes as leading through investments in mining, refining and processing, end use applications, and recycling and reprocessing. On February 3, the day before the ministerial, there was a signing of an MOU between Glencore and the U.S. backed Orion Critical Mineral Consortium, relating to a potential acquisition of assets in the Democratic Republic of the Congo. The fact sheet ties this to a U.S. DRC Strategic Partnership Agreement and to flows of copper and cobalt to the United States. It's Central Africa, not West Africa, but I mention it because it shows the template. A government backed vehicle, a major private operator, and an African asset.

Zach Martin

Let's talk money, because that's where the template gets muscle. Start with Project Vault. On February 2, according to the fact sheet, President Trump announced Project Vault, an initiative led by the Chairman of the Export Import Bank of the United States, EXIM, to establish a domestic strategic reserve for critical minerals. The EXIM board approved a direct loan of up to 10 billion dollars, which the fact sheet says is more than double the largest financing in EXIM's history. The stated design is to shield domestic manufacturers from supply shocks and expand U.S. production and processing.

Emily Martin

And the Brookings paper has an interesting angle on exactly that. In its Washington policy tool table, Project Vault sits under what it calls supply management. Brookings lists strengths and limitations, and the limitations are worth hearing. It notes a trade off between guaranteeing supply today and incentivizing future development. It notes that guaranteed offtake agreements do not minimize other supply constraints caused by extraction and transport costs. It flags the risk of medium term retaliation from China, and it flags ambiguities around release criteria, meaning when and how a stockpile gets drawn down. That's the Brookings view, and it's an analytical interpretation, not a fact about how Vault will necessarily behave.

Zach Martin

Let me translate that for the listener. A stockpile is a shock absorber. It's like having a rainy day fund in your personal finances. Wonderful to have, and the IEA actually makes this case in numbers. It says that for the 11 high risk materials it assessed, the net annual cost of stockpiling for countries outside the dominant supplier is estimated at less than 900 million dollars, modest relative to the potentially major economic impacts of disruptions. But a rainy day fund doesn't build you a house. If you only fill the fund and never invest in new capacity, you've protected the present and mortgaged the future. For West Africa, that matters, because new mines and new processing plants are the thing that gives the region a role. A stockpile mostly cares that the material arrives.

Emily Martin

And that leads us to the institution that matters most for Africa, the U.S. International Development Finance Corporation, the DFC. The Brookings paper reports that in January 2026, DFC's capacity to invest was significantly increased, with its maximum allowed exposure rising from 60 billion dollars to 205 billion dollars. That is more than a tripling. And its mandate was expanded to allow investments in upper middle income countries. Brookings notes that in Africa this opens opportunities in places like Botswana, South Africa, Namibia, Gabon, Equatorial Guinea, Mauritius, Algeria, and Libya. I'd point out, for our West African listeners, that those are not the countries we spend most of this program on. The expansion is real, but the mandate change doesn't by itself point at Freetown or Conakry.

Zach Martin

That's an important correction to a lazy narrative. People hear that the exposure cap tripled and assume a wave is coming to every African mining jurisdiction. The text says something more specific. And the DFC's track record in the region is instructive. The Brookings paper says DFC's largest single investment related to critical minerals is a 553 million dollar loan to the Lobito Atlantic Railway, which connects mines in the DRC and Zambia to the Angolan port of Lobito and supports rehabilitation of 800 miles of railway. And it says DFC has also invested 150 million dollars in expanding bauxite production in Guinea, and the same amount to expand a graphite mine in Mozambique. So Guinea is already in the DFC portfolio, with bauxite.

Emily Martin

The Lobito example deserves a little more time, because Brookings uses it to illustrate how the money multiplies. The 553 million dollar DFC financing attracted a broad coalition, with potential, in Brookings' words, for 3 to 5 billion dollars in financing. It was framed by a seven party memorandum of understanding, including the governments of Zambia, the DRC, Angola, the European Union, the United States, the Africa Finance Corporation, and the African Development Bank. Further funders include development banks from South Africa, Saudi Arabia, and Germany, and private banks such as Standard Bank, Ecobank, and Citi. And Brookings stresses that it was a transport investment. A railway. It recognizes that supply chains for minerals are really supply chains for everything around the mineral.

Zach Martin

Which is exactly the Monday morning point I keep coming back to. A mine without a railway is a hole in the ground. Brookings says the Lobito investment adopts an expansive framework recognizing that investments in related industries, in this case transportation, are essential. It even notes the European Union's announcement of nearly 120 million euros along the corridor to support trade integration and agriculture between the DRC and Angola. Now notice what that means. Agriculture, rail, port, mine, all in one conversation. If I think about West Africa as a long horizon position, that's the mental model. Not a mineral play. A corridor play.

Emily Martin

There's another vehicle you gave us in your notes, the Orion Critical Minerals Consortium. The State Department says DFC put 600 million dollars into Orion for critical minerals investments worldwide, and that this has mobilized an additional 1.2 billion dollars in non U.S. government funding. In the framing for today's discussion, Orion is described as targeting 5 billion dollars. I'd treat that as a target, not a result. The Brookings table classifies Orion under equity, and it lists a strength and a limitation. The strength is that a government as an owner can direct projects in the national interest. The limitation is that business decisions may become divorced from market considerations, and there are novel risks due to the quantity and variety of stakeholders.

Zach Martin

I want to dwell on that tension a moment, because it's the kind of thing a disciplined investor should worry about. When the state is an owner, you may get patience and political cover. You may also get decisions made for reasons other than returns. Neither is automatically good or bad. It depends what you're trying to do. If you're a private investor deciding whether to sit beside a state backed vehicle, you want to know which master the vehicle serves on a hard day. That's not cynicism. It's the same question you'd ask about any partner in a long business relationship.

Emily Martin

Brookings puts the underlying problem plainly, I think. It says private capital is more risk averse than public funding, especially in African countries where U.S. firms and credit rating agencies have less information. It says rating agencies rely more heavily on speculative and subjective data for African countries, enhancing perceptions of risk across the continent. And it names the scale gap. DFC's largest loan in 2024 was 500 million dollars for the Lobito Corridor Project, compared with 2 billion dollars that China loaned to a single subsidiary of the state owned China Minmetals Corporation. And it says China's Sinosure managed a portfolio worth 900 billion dollars, compared with 41 billion dollars managed by DFC in the same period. Those are Brookings' figures, citing other sources.

Zach Martin

And the political risk piece is the one that keeps long horizon investors up at night. The Brookings text says U.S. firms are often concerned that deteriorating security situations or changes in government could jeopardize investments. It points to military coups in Mali, Burkina Faso, and Niger since 2020, which it says led to unexpected renegotiations of agreements between those countries and foreign mining companies. We'll get to Guinea in a bit, but the pattern is already visible. This is the risk side of the ledger, and I'd be doing you a disservice if I only talked about the opportunity.

Emily Martin

So where does the Gulf come in? The State Department fact sheet gives us a few threads. The UAE signed one of the eleven bilateral frameworks. Qatar, Saudi Arabia, Bahrain, and Oman attended. The DFC section says it is in joint venture negotiations with an African trading vehicle that has secured 100,000 tons of copper for the U.S. and 50,000 tons for U.S. allies, Saudi Arabia and the UAE. And it mentions strategic investment partnerships to explore critical mineral investment opportunities with leading Gulf firms. So you can see Gulf capital being invited into a structure with American development finance.

Zach Martin

And the broader picture, as we understand it, is that sovereign and private entities from Saudi Arabia, the UAE, and Qatar are actively exploring West African rail, energy, and mining assets, looking for co investment partnerships alongside Western development finance institutions. I want to be careful here, since I'm working from a general description rather than a specific named transaction, so treat that as a direction of travel, not a list of closed deals. But the logic is easy to follow. Gulf sovereign funds have large pools of capital, an interest in food and energy and metals security, and relationships with trading and logistics networks. A Western development bank brings risk mitigation and standards. Put them together and you have what finance people call blended capital.

Emily Martin

And it's not a comfortable fit in every case. The Reuters reporting we have on Guinea is a reminder. Emirates Global Aluminium, owned by the Abu Dhabi sovereign wealth fund Mubadala and the Dubai sovereign wealth fund, had its bauxite concession in Guinea revoked in August 2025. So a Gulf owned company ended up in a very public standoff with a West African government. EGA called the decision a flagrant violation of its contractual and legal rights and said it would seek redress through legal means. Guinea cited violations of its mining code, specifically failing to present plans to build a refinery. I mention it not to take a side but to say that Gulf capital is not a monolith that is automatically welcome, and it's not automatically wronged, either. It's one player in a negotiation about terms.

Zach Martin

That's the dance. Governments want capital and want control. Investors want access and want protection. And the blended finance mechanisms are the choreography that tries to make both possible. Brookings offers a statistic I find striking: Sub Saharan Africa accounts for 46 percent of all global blended finance transactions, far more than any other region. Which tells you something. This is the region where public risk guarantees, multilateral equity, and concessional layers are most routinely used to coax commercial money across the line. If you want to understand how institutional capital might enter West Africa over the next decade, you'd better understand blended structures, because the commercial money rarely walks in alone.

Emily Martin

And Brookings has a nuanced view of each tool. On loans, it says they can create a multiplier effect by signaling viability, but they come late in the life cycle of mining development, and the speed of securing public financing is slower than the private sector needs. On grants, it says they're beneficial for exploration and other early stage work where risks are high and results are uncertain, but they require high risk tolerance and long term support. On risk insurance, the DFC's political risk insurance, it says this gets at the core of underinvestment, but political risks are difficult to quantify. And technical assistance complements African governments' interest in moving up the supply chain, but it needs to be funded consistently over a long period.

Zach Martin

I love that last phrase, funded consistently over a long period. That's the compounding principle again. The Brookings authors even include, as a formal recommendation, adopting a long term view of planning and implementation, involving Congress and keeping messaging and policy consistent through changes in administrations. Think about what that implies. The best capital in the world is undermined if the policy underneath it flips every four years. For an investor evaluating a ten year position, policy continuity may matter as much as the geology.

Emily Martin

Let's turn from the architecture to the market itself, because the IEA's 2026 outlook paints a picture that is, frankly, more complicated than the political narrative. The first thing the IEA says is that critical mineral prices rebounded in 2025 and early 2026 after declining in recent years. Base metals like aluminium, copper, and tin rose by one third between January 2025 and April 2026, with copper reaching record highs. Lithium prices more than doubled, amid strong demand from energy storage and constrained supply. Cobalt prices rose by around 130 percent, largely due to export restrictions imposed by the Democratic Republic of the Congo.

Zach Martin

And for our West African focus, aluminium and bauxite are on that list, since Guinea is the world's second largest producer of bauxite according to the Reuters piece. But the number that jumped out at me is about strategic minor minerals. The IEA says their prices more than doubled, with tungsten surging sixfold. And there's a price split I want listeners to really absorb. The IEA says export controls have led to a sharp divergence between Chinese markets and those in other regions. In Europe, prices for gallium and the heavy rare earths dysprosium and terbium are currently around five times higher than Chinese domestic prices, and germanium prices are almost three times higher. Let me say that again. Two different prices for the same material, depending on which side of a policy line you're standing on.

Emily Martin

That divergence is the commercial heart of the whole story. If a manufacturer outside China pays five times the Chinese domestic price for a heavy rare earth, then a mine or a refinery outside China that can deliver at something below that five times is suddenly viable, in a way it wasn't when everything was priced off the dominant supplier. That's the opening that governments and development banks are trying to widen. But the IEA is clear that it's not simple. It says new projects in geographically diverse regions often face higher costs than incumbent suppliers. Capital costs for refining projects are 20 percent to over 150 percent higher outside the dominant supplier, due to higher equipment and construction costs. Operating costs are, on average, around 50 percent higher, driven by feedstock and energy prices.

Zach Martin

So think of it as a race where one runner has a thirty year head start and also gets to run downhill. The Brookings paper puts a number on that head start. China controls the majority of processing for minerals like lithium at 71 percent, cobalt at 80 percent, rare earth elements at 92 percent, and graphite at 96 percent. And the IEA adds a sobering trend. Supply concentration in refining continued to edge higher for most minerals in 2025. Excluding rare earths, the average share of the top refining country rose to 72 percent in 2025, up from 70 percent in 2023. So the concentration is not shrinking despite all the speeches. Rare earths are the notable exception, where new projects in the United States and production increases in Malaysia led to a modest decline in concentration.

Emily Martin

And the IEA draws a lesson from that exception that I think is important. It says it highlights the role of targeted policy and investment support in enabling diversification. In other words, diversification happened where policy and capital were aimed at it. It didn't happen by market forces alone. The agency says as much directly, that these cost disadvantages, compounded by technical and skills constraints, infrastructure gaps, and lengthy permitting processes, make it more difficult for market forces alone to bring forward new projects.

Zach Martin

Here's where the phrase from your notes comes in, the mineral security premium. The IEA says the additional cost of supply diversification can be viewed as a mineral security premium, a form of economic insurance against major supply risks. I find that a very useful frame for an investor and for a policymaker. You buy home insurance not because you expect a fire, but because the downside is catastrophic and the premium is small relative to the house. The IEA is saying, in effect, the world may need to pay a little more for diversified supply because the cost of disruption is so large.

Emily Martin

And the IEA gives some illustrative arithmetic that makes the premium seem modest. It says a tripling of rare earth prices would increase the cost of a car by just 0.1 percent, while a tripling of battery material prices would increase the final price of electric vehicles and storage systems by around 5 percent. It also estimates that diversifying magnet rare earth supply chains would require around 60 billion dollars of investment over the next decade, which it calls modest relative to the huge potential economic cost of supply disruptions. Now, those are the IEA's estimates and framing. They tell you the premium looks affordable at the system level. They don't tell you that every individual project will earn an acceptable return, and that's the gap where investors have to do their own homework.

Zach Martin

That's an excellent distinction. A system can rationally pay a premium that no single project can reliably collect. That's why the policy tools matter. The IEA lists them: grants, equity participation, concessional loans, and loan guarantees to lower upfront capital barriers, and then contracts for difference, price cap and floor mechanisms, offtake backstops, and strategic reserves to support operating costs by reducing price and volume risks. And it adds demand side measures, like diversified sourcing requirements, tax credits, and demand aggregation, so manufacturers actually buy from the new suppliers. Supply push and demand pull together. If you only do one, you can build a plant and then find nobody's buying.

Emily Martin

Now let me bring in the part of the IEA analysis that I think is most relevant to the refining debate we had last time. It's about smelters, and it's a cautionary tale. The IEA says the base metal smelting sector is showing increasing signs of stress. Despite rising base metal prices, smelter fees have fallen to historic lows. Benchmark copper smelter fees were settled at zero dollars per tonne in 2026, the lowest level ever agreed in annual negotiations, while spot charges have remained negative since 2024. Zinc and lead smelter fees have also turned negative. Tight concentrate supplies, combined with rapid smelter capacity expansion in China, have driven this. Since 2005, China has accounted for over 90 percent of growth in global copper smelting, and its share of global capacity went from around 15 percent to 50 percent by 2025.

Zach Martin

Let me make sure I'm translating that properly. A smelter earns a fee for turning concentrate into metal. If the fee is zero, the smelter is basically processing for free, and survives on whatever it can sell on the side, the by products. The IEA says that as this revenue stream effectively disappeared, smelters have become increasingly reliant on by product sales, which are inherently more volatile. And those by products are exactly the strategic minor minerals everyone is worried about. Many of them, like gallium and germanium and antimony, are recovered as by products of copper, zinc, and lead processing. So the IEA argues smelters are strategic processing hubs. And it notes utilization rates have diverged sharply, falling below 70 percent outside China by 2025 while remaining around 85 percent in China.

Emily Martin

What I take from that, and I'll flag that this is my interpretation rather than the IEA's conclusion about West Africa, is that a refinery in a developing country can't be thought of as an isolated box. If a processing unit only turns one raw material into one semi finished product at thin margins, it may be fragile. If it's integrated, if it recovers by products, has reliable power, and sits near a corridor and a customer, it has more ways to earn. That's consistent with what the IEA says about the structural imbalance in project pipelines. Refining and downstream capacity are lagging behind mining. In rare earths, announced refining capacity in diversified regions equals around two thirds of expected mined supply by 2035, but planned magnet production is only one third. In battery materials, planned cathode production capacity is only about one third of projected lithium mining capacity.

Zach Martin

So the mining side gets announced, and the middle and the downstream lag. That's the structural gap. And if you're thinking about where a long horizon investor could add value, the gap is a clue. But the IEA gives us a second clue, about timing, and it's the one I find most counterintuitive. Critical mineral investment declined by 9 percent in 2025, ending several years of growth. Battery metals saw the sharpest pullback, with capital spending falling by more than 20 percent, the largest decline in over a decade, and lithium companies cutting investment by around 40 percent. Meanwhile, copper focused companies increased spending by 8 percent. Exploration spending declined by more than 10 percent, with around 45 percent declines in lithium and nickel.

Emily Martin

Those are the numbers behind the idea that a pullback today can set up a squeeze later. And the IEA does say that supply deficits for copper and lithium are set to persist through 2035, based on the project pipeline, although the outlook has somewhat improved for copper. For copper, the projected supply deficit in 2035 narrowed from around 30 percent in last year's outlook to 25 percent, as new projects advance, particularly in the DRC and Zambia. And for cobalt, a projected supply gap has emerged because of the DRC's new export quota. The agency says this underscores how policy changes by major producers can rapidly reshape the global supply outlook. That's an important sentence for West Africa too, because policy changes by producers are exactly what we're seeing in Guinea, Ghana, and elsewhere.

Zach Martin

I want to be careful about how we frame the countercyclical idea, because it can sound like advice, and it isn't. What I'd say is simply a observation about how markets behave. When capital spending falls across a sector, supply projects get delayed, and if demand keeps growing, the gap shows up several years later. The IEA says investors became more cautious despite strong underlying demand. Whether any given investor should act on that is a personal decision with personal risk, which is why this show carries the disclaimer it does. What I can say is that patience and discipline matter more in this sector than prediction. You can't time a mine. A mine takes years.

Emily Martin

There's one more feature of the IEA analysis I'd like to include, because it comes from the news cycle we're all living in. The report discusses the conflict in the Middle East and the closure of the Strait of Hormuz. It says there was considerable impact on mineral and metal markets, notably aluminium, sulphur, and helium. The Middle East accounts for around 8 percent of global aluminium production, and curtailments at several regional smelters added strain to an already tight market. The region also supplies around a quarter of global sulphur, and half of global seaborne sulphur trade passes through the Strait. Sulphur feeds sulphuric acid, which is essential for processing copper, lithium, cobalt, nickel, and rare earths. China curbed sulphuric acid exports in May 2026, and acid costs overtook energy costs to become the largest cost component in some cases.

Zach Martin

Which is a fine illustration of how interconnected the web is. A conflict in one place, a chemical feedstock in another, and suddenly the cost of processing a mineral in a third place jumps. If I were coaching an investor, I'd say that's the lesson about concentration in general. The more your supply chain depends on a single node, whether it's a country, a strait, or a chemical, the more a single shock can travel. And that's the logic behind the Washington push, the Gulf interest, and the African governments' own push to capture more of the chain. Everybody's trying to move from being a node to being a network.

Emily Martin

Well said. And one more IEA finding connects the dots for the region we cover. It says public finance commitments in advanced economies reached around 65 billion dollars in 2025, over four times higher than in 2023. But it adds that a considerable gap remains between commitments and actual disbursements, which will ultimately determine their impact on supply diversification. Commitments versus disbursements. Paper versus assets. It's the same theme, in the agency's own words. I'd encourage every listener, whatever your role, to keep that gap in mind whenever you read a big headline number.

Zach Martin

Let's go to the intellectual centerpiece of the hour, which is the Brookings report from July 2026, called Toward a U.S. Africa Critical Minerals Investment Strategy, by Dafe Oputu and Landry Signé of the Africa Growth Initiative. And I should note that Brookings says its conclusions are solely those of its authors and not the institution. The authors begin with a premise: Africa holds roughly 30 percent of global critical mineral reserves, and the U.S. needs reliable access to these resources. They also describe what they see as an underused asset, which is U.S. private sector financing.

Emily Martin

And what I appreciate is that the authors don't pretend the strategy is obvious. They identify three questions that must be answered, and they say the answers may differ across minerals and cases. I'd like to take them one at a time, because each one is, to my mind, a fault line in how the whole West African story could go. The first question is about processing location. Is the goal to house all processing in the United States, or to partner with African countries to encourage local value addition?

Zach Martin

This is the one that connects directly to our earlier episode on refining mandates. And here's a number from the framing we're working from, which cites a BloombergNEF study. Producing battery precursors, specifically NMC, in Africa costs roughly 39 million dollars for a ten thousand ton plant, versus about 112 million dollars in China and over 120 million dollars in the United States. Now, a caution, because I haven't independently verified those figures beyond how they've been described to us, and Brookings itself says that if extraction and refining are integrated, Africa's exports of battery precursors and other intermediate materials become cheaper than in other jurisdictions, including China, citing BloombergNEF from 2021. So treat the numbers as a modeled estimate. But the direction is striking. If the modeling holds, regional midstream processing can reduce capital expenditure and transport friction.

Emily Martin

The direction is also politically interesting. If it's cheaper to build precursor capacity near the mine, then the interests of the Western buyer and the African government may line up more than people assume. Brookings says as much in its recommendations, that there are opportunities for synergy between U.S. interest in a diversified and reliable supply chain and African interests in moving into midstream processing. But I'd temper it with the IEA data we just discussed, that capital costs for refining outside the dominant supplier run 20 percent to over 150 percent higher. These aren't contradictory. The BloombergNEF comparison is about where in the world to build, and the IEA comparison is about building anywhere outside the incumbent. Africa could be the cheapest place outside China and still face a premium against China.

Zach Martin

That's a subtle and useful reconciliation. Cheapest of the alternatives is not the same as cheapest, and the gap is what the security premium is meant to cover. Now, the second question. Should the U.S. prioritize returns on critical mineral investments, or be willing to subordinate profits to expanding market share? And here Brookings contrasts the approaches. It says the Chinese government made a strategic decision in the 1980s to prioritize gaining market share in priority minerals over pursuing returns on investment. And it says that given high levels of state ownership, Chinese firms are less sensitive to risk.

Emily Martin

And the evidence it offers is vivid. In 2025, an effort to develop a competing rare earths processing chain, starting from an Australian owned mine in Tanzania, collapsed after the company was acquired by Chinese Shenghe Resources, for an offer four times its share price. That's a data point on what it means to compete with a buyer who isn't maximizing the return on that specific deal. And Brookings estimates Chinese spending on critical minerals in Africa in 2023 at 8 to 10 billion dollars, compared with 300 million dollars for the U.S. Again, those are estimates drawn from other sources, but the order of magnitude gap is the point. The authors say that, compared with China, the U.S. approach to mining investments in Africa is more market driven even when government financing is involved.

Zach Martin

So the question is whether the West wants to play a different game or the same game. And I want to give a pragmatic view from a business discipline perspective. Commercial private capital, the kind that fills institutional portfolios, needs hurdle rate returns and a way to mitigate political risk. It can't be told to love losing money for the national interest. If a government wants private capital to behave like a state champion, it has to either pay for the difference, through subsidies, price floors, or equity, or accept that the capital will go elsewhere. That's not a moral argument, that's arithmetic. And it's why the policy tools in the IEA list, like price cap and floor and offtake backstops, keep appearing in these discussions.

Emily Martin

And the third question may be the most practical for West Africa. Should U.S. policy prioritize ensuring reliable access at a low cost for current defense and manufacturing needs, or incentivize the development of new projects? Stockpiling, such as Project Vault, offers a near term buffer and price stabilization. But it does not solve what Brookings elsewhere calls the long lead items, mine development, power deficits, and transport corridors. A stockpile can only hold what has been produced. If the pipeline of new production isn't there, the reserve is a pond with no river feeding it.

Zach Martin

I like that, a pond with no river. So the three trade offs are, in plain language: where do you process, do you chase returns or share, and do you buffer today or build for tomorrow. And Brookings doesn't say there's one right answer. It says the answers might differ by mineral. It also proposes four recommendations that would help whichever way the choices fall. Develop tools and frameworks to better facilitate blended finance, including standardizing and accelerating the process by which firms apply for public assistance. Prioritize a select group of critical minerals. Engage bilaterally and regionally with African partners. And adopt a long term view.

Emily Martin

On the second recommendation, selectivity, the authors note that the U.S. Geological Survey identifies 60 minerals as critical, but sustaining policy at the scale and duration required will require selectivity. They name rare earths, cobalt, lithium, and graphite as strong contenders for prioritization, given China's dominance in their processing and their role in magnets and batteries. Now, for West Africa this is interesting, because the region's endowments don't map perfectly onto that list. Bauxite and aluminium, rutile, gold, and monazite are all prominent. Lithium is emerging in Ghana and Sierra Leone. Rare earths appear in monazite. So whether the region's resources get priority attention depends partly on how the Western list gets drawn.

Zach Martin

Which is a good moment to talk about the thing that Brookings argues is missing from the whole picture, and that's exploration. The framing we're working from says global exploration spending on the entire African continent remains far below budgets allocated to single countries like Canada or Australia, despite Africa offering higher mineral value per exploration dollar. I'd flag that that's the characterization we've been given of the Brookings argument, and the IEA data we do have says exploration spending declined by more than 10 percent globally, with Asia Pacific bucking the trend with a 20 percent increase. But the logic holds together. If you have 30 percent of reserves and a small share of the exploration dollars, then the map of what's known is thinner than the map of what exists.

Emily Martin

And that connects to the grants tool. Brookings says grants are beneficial for exploration and early stages where risks are high and results uncertain, and it mentions programs like the U.S. Trade and Development Agency's critical minerals project scoping missions. Early money is the scarcest money. Loans, as Brookings notes, come late in the life cycle. So there's a gap in the early stage that is hard for large institutions to fill, because the checks are small, the geology is uncertain, and the on the ground complexity is high. I'd say that's the very place where specialized local operators have a role, which we'll come back to.

Zach Martin

Let me bring in one more tool that Brookings highlights, because it relates to risk. It says risk insurance gets at the core of underinvestment, but political risks are difficult to quantify. I want to spend a minute on why that sentence matters. In finance, if you can't quantify a risk, you can't price it, and if you can't price it, you either refuse the deal or demand an enormous cushion. That's what happens when rating agencies lean on speculative and subjective data. A lot of what we do in an hour like this is trying to turn fuzzy political risk into something more concrete. Who has a track record of honoring contracts, what does the legal framework say, how do disputes get resolved, how are communities involved.

Emily Martin

Which brings me to what the Brookings authors call local buy in. Their third recommendation is to engage bilaterally and regionally with African partners to get the local buy in, align mutual goals, and foster long term commercial relations. They say getting greater support from African governments and citizens can make U.S. investment more attractive than its competitors and can reduce the potential political risk to private investors. I think that's a profound point, and it's easy to skim past. The most effective political risk mitigant may not be an insurance policy. It may be a community that benefits and a government that feels like a partner. That is slower and harder than signing a framework, but it's more durable.

Zach Martin

And it echoes something that the Ghana experience shows in miniature. The Carnegie Endowment published a paper in July 2025 on the Ewoyaa lithium project, and it's a rich case, so let me sketch it. Ghana granted Barari DV Ghana Limited, a subsidiary of Atlantic Lithium, a fifteen year mining lease at Ewoyaa in October 2023. That was the first mining lease granted to a foreign company to mine critical minerals in Ghana. Under the Green Minerals Policy, approved in July 2023, the royalty for the deal was set at 10 percent, up from 5 percent in other contracts, and the policy provides for state participation of a minimum of 30 percent in green mineral operations, according to the paper.

Emily Martin

And the details of how that deal was negotiated matter for our theme. The Carnegie paper reports that local government officials, traditional leaders, and community members from the Mfantseman Municipality were involved in the negotiations, which led to an agreement to allocate 1 percent of the company's revenue to a Community Development Fund for education, health, and agriculture. Through Ghana's Minerals Income Investment Fund, the government will also acquire an additional stake in the project. Free carried interest was increased from 10 percent to 13 percent. And Barari is to be listed on the Ghana Stock Exchange to ensure local participation. These are the kind of terms that governments across the region are now looking at.

Zach Martin

But, and this is important, the Carnegie paper is candid about the friction. As of the paper's publication, Parliament had yet to ratify the mining lease, as Ghana's law requires. The Ghana Chamber of Mines urged prompt ratification in April 2025 and warned of repercussions from delay. The then opposition, the National Democratic Congress, raised concerns about the terms, including the fixed royalty and engagement with local communities. Civil society was split, with the Institute of Economic Affairs calling the contract colonial type in a 2023 statement, and others hailing the terms. And the village of Ewoyaa itself is small, 108 households and about 580 people, mostly farmers, according to the paper. That's a reminder that behind every billion dollar projection is a place where people live.

Emily Martin

Yes. And I'd add that the Carnegie authors note the legal sequence, that a mining lease must be laid before Parliament for ratification under Ghana's constitution and mining law. So even a government that grants a lease is not done. There's another institutional step. From an investor's point of view, that's a reminder that approvals have layers, and the layers have timelines. And it's part of why the best due diligence is institutional as much as geological.

Emily Martin

Let's land in West Africa proper and spend real time on Sierra Leone, because it's a country that appears in our sponsor's name and in the State Department's attendee list. In the creator's briefing for this episode, Sierra Leone's National Critical Minerals Strategy for 2026 to 2031 was unveiled in Freetown by Vice President Mohamed Juldeh Jalloh and Mines Minister Julius Daniel Mattai. It's described as strategically essential to economic diversification, industrialization, and the green economy transition.

Zach Martin

Let's go through the endowments, because the specifics tell you what the strategy has to work with. The strategy highlights spodumene, which is the lithium bearing mineral, in Kangi Hills, Loko Hills, and Kambui Hills, with commercial activity slated for 2026 and 2027. It highlights top tier rutile assets in Moyamba District, with Sierra Rutile at Area 1 and Sembehun. It lists bauxite in Port Loko and Kambia. And it points to monazite, a rare earth bearing mineral, with historic concentrations of 40 to 42 percent. And it reports that mineral export values reached 1.3 billion dollars. So you have lithium, titanium feedstock, aluminium feedstock, and rare earths in one small country.

Emily Martin

Now I want to read you the line that I think captures the philosophy. Minister Mattai said, and I quote, "If we mine responsibly but export all the value, then we have lived well, but not wisely." And he declared that Sierra Leone is, in the briefing's words, open for business, not capture. I find that a very wise formulation, because it rejects two caricatures at once. It doesn't say close the doors, and it doesn't say take whatever is offered. It says responsible mining is necessary but not sufficient. Value has to stay.

Zach Martin

And it's the same insight that runs through every document we've discussed today. Brookings says African governments want to move into midstream processing. The IEA says refining lags mining. Guinea revoked a concession over a refinery plan. Ghana wrote value addition into its lithium lease. So when a Sierra Leonean minister says export all the value and you've lived badly, he's speaking in a regional chorus. But here's the practical test, and I'd offer it as coaching rather than criticism. A strategy is a goal. A goal becomes real through execution, and execution is made of boring things, such as power, roads, permits, titles, and trained people.

Emily Martin

Let me widen to the regional policy shift the Reuters piece describes, because Sierra Leone isn't alone. Guinea's move in August 2025 was striking. The government revoked the bauxite concession held by Guinea Alumina Corporation, the Emirates Global Aluminium subsidiary, a 690 square kilometer concession containing around 400 million tons of bauxite mineral resources. According to Reuters, the decree said GAC failed to comply with regulations requiring mining firms to present plans to build refineries, and transferred the concession to the state backed Nimba Mining SA free of charge and without compensation. EGA denounced it and said it would pursue legal redress, including through international tribunals.

Zach Martin

And here's the part that I think listeners overlook. Guinea's bauxite exports surged 36 percent year on year to a record 99.8 million tons in the first half of 2025, despite stricter regulations, according to Reuters. So the regulatory tightening didn't stop the trade. Analysts warned that seasonal rains and other effects could be felt later in the year. A Panmure Liberum commodities head, Tom Price, said that the swift transfer of ownership might calm short term supply fears, and that it signals Guinea's intent to capture more value by advancing domestic refining capacity. That's his interpretation, and I think it's reasonable. But it shows how differently the same event can be read: as a resource nationalist grab, as a legitimate enforcement of a mining code, or as a signal about where the region is headed. Probably some of each, depending on whose seat you're in.

Emily Martin

Reuters also noted that other military led governments in the region have tightened control over natural resource sectors to gain more revenue from surging commodity prices, notably gold. Mali put Barrick Mining's Loulo Gounkoto gold complex under temporary state control, and Niger and Burkina Faso sought more favorable terms from foreign firms. I'd be careful not to lump everything into one story. Ghana and Sierra Leone are not military led, and their approaches, an equity stake and royalty framework in Ghana, a national strategy in Sierra Leone, are different in kind from a concession revocation. But the common thread is that governments are demanding equity stakes, local processing, and community funds, and they're doing so while commodity prices are high and the geopolitical demand for these minerals is acute.

Zach Martin

And Nigeria is part of that mosaic, in the framing we have. It's described as issuing exploration grants under the EMERGE endowment and conditioning mining licences on local processing. I'll keep that at the level we've been given. It tells us the pattern isn't confined to the small coastal states. A very large economy is also tying access to processing. So if you're an international investor, the era of simply showing up, digging, and shipping is ending across the region. The new bargain is, in effect, you can have access, and in exchange we want a stake, a plant, and a community benefit.

Emily Martin

And that bargain, I'd argue, is not necessarily bad for investors with patience. A project with a local equity partner, a community fund, and a processing component may have a sturdier social license. The Brookings authors point to this when they say African government and citizen support can reduce potential political risk. The deals that run into trouble tend to be the ones where one side feels it has been captured. So there's a way to read the new bargain as a durability feature. It's costlier up front and possibly more resilient later. Though I'd stress, that is an interpretation, and the disputes in Guinea show the process can be rough.

Zach Martin

Now the infrastructure piece. Everything we've said hinges on it. Mining can't exist in a vacuum, as the briefing puts it. Stranded assets are what you get when the ore is real but the railway, the port, and the power are missing. The Lobito example showed what a corridor looks like when it's financed as a package. In West Africa, the framing points to open access shared transport corridors, meaning rail and deepwater ports that more than one mine can use, and regional energy integration, such as the West African Power Pool delivering hydro power across borders to stabilize operating costs.

Emily Martin

Let me connect that to the IEA's cost findings. The agency says operating costs outside the dominant supplier are around 50 percent higher, driven by feedstock and energy prices. Energy is a major piece of that. If a region can deliver reliable, lower cost power, perhaps hydro across borders, to a processing facility, it attacks the operating cost premium at its root. And the IEA also highlights infrastructure gaps and permitting as constraints. So the unglamorous work, power purchase arrangements, grid connections, shared rail, is not peripheral to the minerals story. It is the minerals story.

Zach Martin

I want to put an analogy on the table, because I think it helps. Think of a minerals strategy as a house. The headline is the roof, the part everyone sees, with the MOU signed, the minister's speech, the big number. But a roof without walls is a tarp. The walls are the corridors and power. And the foundation, the part nobody photographs, is land title, legal formalization, environmental and social compliance, and community trust. When you're a long horizon institutional investor, what you're really underwriting is the foundation, because the roof can't be better than what's underneath it.

Emily Martin

And that's where the on the ground layer enters, and I'd like to speak about it carefully because our sponsor works in exactly this space. Leone Assets, as described, is a U.S. company with operations in Freetown, working across infrastructure, rare earth and mineral exploration, agriculture, and land advisory. The briefing for this episode argues that the decisive difference between paper MOUs and operating assets lies in land advisory, legal formalization, ESG compliance, and community trust, and that boots on the ground players become an execution bridge for long horizon Western and international institutional investors. I'd say plainly that this is a point of view the sponsor's business naturally shares, and listeners should weigh it as such. But the underlying logic is consistent with what the independent research says, particularly the Brookings emphasis on local buy in and the IEA's emphasis on permitting and infrastructure constraints.

Zach Martin

I'd add that it's a sensible logic even without the sponsor. If an institutional investor in New York or Seoul or Abu Dhabi wants to participate in a West African asset, they typically aren't staffed to sort out who holds customary land rights on a given parcel, or how a farming community will be consulted, or how an exploration license interacts with agricultural land use. Somebody has to do that, and it's slow, relationship driven work. It's not glamorous. It's compounding, though. Each properly documented parcel, each respected agreement, each well run consultation makes the next one easier. That's the small improvements principle applied to a property system.

Emily Martin

And the Ghana case showed what it looks like when community engagement shapes terms. A one percent revenue allocation to a development fund came out of negotiations that included traditional leaders and local officials. And the Carnegie paper also records the other side, that the village lacks a nearby clinic, school, and police station, and that communities displaced by mining can face high rents, unfavorable land tenure systems, and loss of farmland. So agriculture and land are not side issues. They're the daily reality of the places where minerals are found. A mine that undermines the food system around it creates a risk that no insurance policy fully covers.

Zach Martin

Let me try to pull the thread together, as we head toward the end. We began with a single day in Washington, where 54 countries and the European Commission gathered, the U.S. signed eleven frameworks including one with Guinea, and a successor forum to the Minerals Security Partnership, FORGE, was launched. We saw the money: Project Vault's up to 10 billion dollar EXIM loan, DFC's exposure cap going from 60 billion to 205 billion dollars, the 600 million dollar anchor into Orion, and the U.S. claim of more than 30 billion dollars in support over six months. We saw Gulf capital circling, with all the promise and friction that implies.

Emily Martin

And we saw the market's honest complication, that building outside the dominant supplier costs more, that smelter economics are brutal, that capital spending fell in 2025, and that the IEA frames the extra cost as a mineral security premium. We saw Brookings ask the three questions nobody can dodge: where to process, whether to chase returns or market share, and whether to buffer or build. And we came home to West Africa, where Sierra Leone's 2026 to 2031 strategy, Guinea's concession enforcement, Ghana's lithium terms, and Nigeria's conditions on licences all say the same thing in different accents. Value should stay closer to home.

Zach Martin

If I had to give the listener a coach's takeaway, and again this is education and not advice, it would be about the gap between announced and operating. Commitments versus disbursements, MOUs versus assets, strategies versus corridors. The IEA flagged that gap, Brookings flagged it, and every country we looked at lives inside it. The people and institutions that learn to close that gap, patiently, with attention to power, transport, land, and community, are the ones building the long horizon position. Everyone else is reading headlines.

Emily Martin

And I'd add one caution of my own, as the one who tends to see the institutional weather. Long horizon does not mean risk free. The risks we named are real: policy reversals, contract disputes, the difficulty of pricing political risk, the possibility that Western commitments move faster on paper than in cash, and the chance that a prioritized mineral list shifts. A wise observer holds the opportunity and the risk in the same hand. West Africa's story is a long one, and it will have setbacks. The honest thing is to say both.

Zach Martin

Well said. That's our time on this deep dive. Thank you for spending the hour with us on The West Africa Desk, heard on KMKT, The Home of IR Hub Radio. This series is sponsored by Leone Assets, at leoneasset.com, a U.S. company with operations in Freetown, Sierra Leone, working across infrastructure, rare earth and mineral exploration, agriculture, and land advisory in West Africa. And one more time, because it matters: this was a sponsored informational discussion. It is not investment advice, and it is not an offer to buy or sell securities. Please do your own research and speak with qualified professionals before making any decision.

Emily Martin

Thank you all for listening. We drew today on the U.S. State Department's fact sheet on the 2026 Critical Minerals Ministerial, the International Energy Agency's Global Critical Minerals Outlook 2026, the Brookings Institution's report on a U.S. Africa critical minerals investment strategy, Carnegie Endowment's research on Ghana's lithium project, and Reuters reporting on Guinea. Where we interpreted, we tried to say so. Until next time, keep your eyes on the corridors, not just the headlines.