By Christopher Burke

Africa holds more than 30 percent of the world’s known reserves of critical minerals including cobalt, lithium, nickel, and rare earth elements essential for electric vehicles and renewable energy systems. Despite this geological advantage, Africa attracts only 3 percent of global energy investments annually and a mere 2 percent, worth approximately US$40 billion, of global clean-energy finance as documented in the African Development Bank’s recent 2025 report. With global demand for these minerals projected to surge by as much as 500 percent by 2050, the stakes are high for Africa’s role in the energy transition.

There are compelling reasons why the private sector could emerge as a driver of responsible mineral development. Financial markets are tightening the screws.  Investors increasingly rank environmental, social, and governance (ESG) performance as a top operational risk above cyber threats or capital access. Companies that fall short of ESG standards risk losing access to capital markets or exclusion from lucrative supply chains. Long-term off-take-backed investments in the mining sector increasingly make financing conditional upon credible ESG commitments.

Private actors control the operational levers. They run the mines, logistics systems, and processing plants, providing opportunities to implement traceability tools and performance dashboards that increase profitability, competiveness, and accountability. Early movers that embed credible ESG practices gain reputational and financial advantage, forcing competitors to follow suit. This is a coordination dynamic familiar in game theory. Once one actor shifts, others must adjust to remain credible in the eyes of buyers and financiers.

Private leadership alone cannot deliver sustainability. The incentive to defect remains strong. In weak governance environments, the short-term profits from cutting corners on safety, labor or environmental safeguards often outweigh reputational risks. This reflects a prisoner’s dilemma dynamic. Each company has reason to free-ride if rivals are paying the costs of compliance. Fragmented global demand compounds the problem. Western markets are embedding strict ESG requirements such as the EU Battery Passport while Chinese and Gulf buyers tend to prioritize infrastructure development, industrialization, and job creation as benefits to host countries. The result is uneven pressure that weakens the incentive for firms to align on higher standards.

There are a growing number of concrete examples of private-sector leadership. Development finance institutions are making ESG compliance a condition for capital. The Africa Finance Corporation’s Project Development Facility requires adherence to ESG criteria in mining investments. The co-financing of the Lobito Corridor demonstrates how large-scale infrastructure tied to critical minerals can be structured with sustainability benchmarks from the outset. At the technological level, blockchain systems, QR-coded consignments, and satellite monitoring are making it harder for companies to cheat undetected. In terms of governance, industry consortia such as the International Council on Mining and Metals, the Copper Mark, and the Responsible Minerals Initiative, along with geopolitical initiatives such as the Minerals Security Partnership may be considered reputational clubs where compliance grants access and exclusion carries significant penalties.

ESG standards must be hardwired into the contractual DNA of mining and infrastructure deals to strengthen the sustainability of such leadership. This requires covenants and off-take agreements tie access to financing and markets to verifiable performance with penalties for non-compliance. A reduction in regulatory fragmentation through continental templates under the African Continental Free Trade Area (AfCFTA) or the African Minerals Development Centre is also necessary to facilitate consistent compliance across jurisdictions. Transparency is another critical element. Publishing company-level performance data through open dashboards can generate reputational multipliers, creating common knowledge and peer pressure that strengthens compliance. Firms must perceive ESG compliance as a forward-looking investment in repeated interactions with financiers, buyers, and governments rather than a one-off concession.

This is all playing out against the backdrop of an increasingly multipolar world. Africa’s critical minerals are no longer contested by a single dominant bloc, but by range of actors from the United States and European Union to China, India, Russia, and the Gulf. This competition sharpens risks and opportunities. Fragmentation can fuel a race to the bottom, but also provides African governments and firms leverage to demand better terms if they coordinate effectively.

Strengthening African agency requires more than aspirational declarations. It demands mechanisms that shift structural leverage and financial control back to the continent. One such innovation is the proposed African Unit of Account (AUA): a non-circulating currency backed by pooled reserves of critical minerals including cobalt, copper, lithium, and rare earths. Anchored in real assets, the AUA offers the potential to reduce currency volatility, facilitate cross-border financing, and enhance regional integration to help African nations negotiate from a position of strength in global markets. The establishment of the African Credit Rating Agency (AfCRA) is another strategic step that enables African countries to assess their own creditworthiness based on localized criteria, countering the often pro-cyclical and externally biased assessments of traditional rating agencies.

Beyond these continental initiatives, national governments are asserting agency in more direct ways. In Mali, authorities recently seized over a ton of gold from the Canadian mining firm Barrick Gold, signaling a new willingness to confront imbalances in resource control. Burkina Faso nationalized five gold mining assets this year alone and shifted control to a state-owned mining company as part of a broader shift toward domestic control of extractive value chains. Meanwhile, membership in the Extractive Industries Transparency Initiative (EITI) has been shown to increase foreign direct investment by nearly 50 percent, underscoring how African governments can leverage open-data frameworks to strengthen governance and attract capital. Such innovations move African economic self-reliance from rhetoric to actionable strategy.

Regional harmonization of ESG standards, pooled bargaining platforms for off-take agreements, and transparent digital registries of contracts and performance can help level the playing field. These are not abstract ideals but realistic steps that allow African states and firms to transform mineral wealth into lasting development.

Without these measures, ESG risks becoming a hollow label and adornment to contracts without force. ESG has the potential to evolve into a self-enforcing equilibrium where cooperation is rational, profitable, and sustainable. Africa’s future in the energy transition will hinge on whether ESG is treated as a strategic design, not a voluntary aspiration.

Christopher Burke is a senior advisor at WMC Africa, a communications and advisory agency located in Kampala, Uganda. With over 30 years of experience, he has worked extensively on social, political, and economic development issues focused on extractives, governance, environment issues, policy formulation, communications, advocacy, conflict transformation, international relations, and peace-building in Asia and Africa.