Critical minerals in Africa

4. Trade policy, global markets and value chain integration

4.1. Agreements governing trade of African minerals

Several trade agreements shape global trade of critical minerals in different ways, including key World Trade Organisation agreements: the General Agreement on Tariffs and Trade (GATT), the Agreement on Trade-Related Investment Measures (TRIMS), and the Agreement on Subsidies and Countervailing Measures (SCM). The operation of Bilateral Investment Treaties (BITs) is also notable, although African countries do not appear to have more BITs in force than other countries. Trade arrangements that have unique impacts on African countries include the Africa Continental Free Trade Agreement (AfCFTA) (as well as the trade arrangements of various regional economic communities within the continent, such as the Southern African Development Community (SADC) Trade Agreement and the Customs Union Protocol and Common Market Protocol of the East African Community (EAC), the US’ African Growth and Opportunity Act (AGOA), and China’s recent duty-free arrangement with African countries.

4.1.1. African Continental Free Trade Agreement (AfCFTA)

The AfCFTA and other African initiatives aim to enhance intra-African trade, support value addition, and strengthen regional value chains on the African continent. Although AfCFTA is a trade agreement, it offers a route toward greater regional integration through improved trade facilitation, potentially encouraging intra-African trade of mineral resources and development of regional mineral value chains by, for example, removing tariffs on cross-border sales of mineral products. Theoretically, this could make it comparatively cheaper to sell mineral products to processing facilities in African countries than to buyers overseas. However, achieving this will require significant investment in cross-border trade infrastructure as well as regional cooperation on mineral processing and value addition. Ambitions are high but implementation has lagged and progress on increasing African value addition has been hampered by unfavourable global market conditions and difficulties competing against established processors, especially in China, who benefit from cheaper finance and subsidised electricity.

4.1.2. African Growth and Opportunity Act (AGOA)

AGOA is a trade preference programme under which the US has extended duty free, quota free access to the US market for selected products from eligible African countries since 2000, including mineral products. The AGOA Extension Act was passed by the House of Representatives in January 2026 (Ford, 2026[95]) providing a temporary extension to 31 December 2026. As before, eligibility of African countries remains conditional, with the US able to suspend African countries from the programme in response to instances of political instability and human rights violations, an aspect that introduces uncertainty and unpredictability for African beneficiaries.

4.1.3. China’s tariff free access initiative

In 2025, China announced that it would eliminate tariffs on all imports from African countries (excluding Eswatini due to its diplomatic recognition of Taiwan). This represents an extension of China’s previous tariff free programme, which had applied only to African LDCs, making a more comprehensive – and less conditional – trade offer to African countries than extended by either the US or EU.

4.2. Trade restrictions on critical mineral exports imposed by African countries

African countries have imposed several different restrictions (notably, export bans, quotas, and levies) on the export of unprocessed mineral ores in recent years.

4.2.1. Export bans

In relation to the minerals included in this study, the following bans on the export of unprocessed minerals have been implemented:

• Tanzania – copper and nickel (March 2017) (Koigi, 2017[96]).

• Zimbabwe – raw lithium (December 2022), with planned ban on lithium concentrates to start in 2027 (Banya, 2022[97]).

• Namibia – critical minerals (not including uranium) (June 2023) (Nyaungwa, 2023[98]).

• Ghana – raw lithium (June 2023) (Atta, 2023[99]).

• DRC – cobalt (February 2025) (Mining Technology, 2025[100]).

• Malawi – all raw materials, including graphite (October 2025) (Adeyemi, 2025[101]).

• Gabon – manganese (planned to start 2029) (Africanews and Associated Press, 2025[102]).

Apart from DRC’s cobalt ban, these export bans align with the most common motivation behind export bans: to enforce more local mineral processing. These bans form part of African countries’ efforts to retain a greater share of the value of their mineral wealth. The adoption of export bans has often come after years of wrangling between host governments and mining companies over local processing, with mining companies having resisted voluntarily efforts due to, for example, higher costs of local processing compared to established larger-scale facilities elsewhere (e.g., due to higher electricity or transport costs) and mineral processing being beyond the core competency of most mining companies.

DRC’s cobalt ban is unique in that it was not implemented primarily to enforce local processing (although it is hoped that it will contribute to this), but rather as a temporary measure to restrict global supply to shore up cobalt prices, which had slumped to historically low levels due to supply exceeding demand. By October 2025, cobalt prices had more than doubled since the embargo started in February 2025 (Houenou, 2025[103]). DRC’s notable market share of cobalt production – at around 76 percent of global supply – enables it to attempt to influence global prices in this way (Mineral Resources Program, 2025[48]). This is an option not available to the vast majority of producing countries, who tend to be more minor global suppliers.

4.2.2. Export quotas

Export quotas for unprocessed minerals have been used less frequently than export bans, although they are used in other extractive sectors, including timber in countries such as Gabon. They can serve different purposes to export bans, comprising a more sustainable mechanism to control supply (and therefore prices) for countries with the global market share that empowers them to do this, and they can be used to enforce more moderate extraction rates as part of environmental conservation or responsible resource management strategies. They are also seen to encourage local value addition as constraints only apply to exports, not to local industry.

DRC converted its temporary cobalt export ban to a quota regime in October 2025, capping annual exports at 96,000 tonnes for 2026 and 2027 (Africanews and Reuters, 2025[104]). This is intended primarily to constrain global supply over a longer term to keep cobalt prices higher than they would be without such constraints. Such a regime is complex to implement and there are concerns that it will create significant opportunities for rent-seeking and corruption through discretionary application and give rise to prolific smuggling to circumvent restrictions (Kedem, 2025[105]).

4.2.3. Export levies

Rather than restricting exports, some countries impose export levies on exports of unprocessed minerals to encourage (rather than mandate) local processing. Examples of African countries that have adopted export levy regimes include:

• Zambia – a 15% export levy is imposed on the export of unprocessed minerals (Kambole and Kambani, 2019[106]).

• South Africa – adoption of a 25% export tax for raw chrome is under consideration (Hidayat, 2025[107]).

Whether export levy regimes are impactful depends on how rigidly they are enforced – where mining companies can easily secure waivers, it creates scope for discretionary application and corruption. In Zambia, mining companies frequently apply to the Ministry of Finance for export levy waivers, claiming that there is insufficient domestic processing capacity or inadequate and costly electricity, claims are difficult for the government to verify at any point in time (Zambia Revenue Authority, 2024[108]). Waivers are often granted, undermining efforts to enforce more local processing.

As quantitative restrictions, export bans and quotas are technically not permitted under WTO rules unless an exemption is met. Export restrictions impact the domestic mining sector of producing countries in several ways. First, they lower export volumes, which impacts export earnings and government revenues from the sector. Second, they can push down domestic mineral prices to below international prices (due to lower demand domestically), which benefits local processors who can buy mineral inputs more cheaply, but harms mining companies. This can cause mining companies to disinvest from a country’s mining sector over time, particularly if local market conditions are not conducive to undertake local mineral processing or value addition. Third, such restrictions can also prompt technological innovations away from minerals subject to export restrictions or other supply chain risk – this is currently being seen in battery developments away from cobalt.

4.3. Limitations to African participation in global mineral value chains

Trade restrictions – both those imposed by African producers and those applied against them – significantly affect their ability to participate fully in global value chains. When African countries impose export restrictions, they often undermine the development of regional value chains for mineral processing and value addition. If each producer attempts to establish its own processing capacity, the result is fragmented value chains, excess capacity, and facilities that struggle to achieve the economies of scale needed to compete with established processors. Such uncompetitive facilities are unlikely to attract investment or deliver the developmental benefits governments seek. By contrast, regional processing hubs that source ore from multiple countries can operate at greater scale and are more likely to be cost-competitive – but export restrictions and protectionist policies hinder the regional cooperation required for successful mineral processing in Africa.

Importing countries also apply trade restrictions on minerals and mineral-based products from African producers, further limiting their ability to integrate into global value chains. These restrictions can take several forms, including those outlined below.

4.3.1. Import tariffs

Import tariffs make it more costly for African producers to sell their products in certain markets, thereby raising barriers to trade. Consuming countries often apply import tariffs to protect their own domestic industry from foreign competitors. For example, the EU imposes 25% tariffs on steel imports (with plans to raise this to 50%) as a measure to protect Europe’s steel industry from foreign competitors, locking out African steel producing countries, such as South Africa and Egypt (Payne, 2025[109]).

Exporters from developing countries tend to face higher tariffs on intermediate or final products than on raw materials, which are often exempted from tariffs as they are needed by industry in consuming countries. This practice is known as ‘tariff escalation’ and it disproportionately affects exports from developing economies, making their products less competitive in global markets, thereby discouraging investment in value addition in developing countries (UNCTAD, 2025[27]). Tariff escalation operates as a structural barrier to industrialisation and development in least developed countries, hindering investment in manufacturing and locking African countries out of more advanced stages of global value chains (UNCTAD, 2025[27]).

4.3.2. Other unilateral tariff measures

Other unilateral tariff measures, such as the EU’s Carbon Border Adjustment Mechanism (CBAM) also impact African producers. CBAM will require European importers to pay for the carbon emissions generated in the production of imported products, applying similar carbon pricing mechanisms to imports as to products manufactured within the EU. By levying tariffs on imported products produced using fossil fuel-fired electricity, CBAM raises the barrier of entry to the EU market for some African producers. This will have a significant impact on countries like South Africa, which relies on coal to generate around 82% of its electricity and whose iron and steel industries will face higher tariffs under CBAM (IEA, n.d.[110]).

4.4. Global trade policies: disadvantages to African producers, benefits to global markets

Beyond tariff regimes that protect industry in developed countries and operate to make exports from Africa and other developing regions uncompetitive (especially final consumer products) several trade policies also serve to disadvantage African producers while benefiting international corporations and consumer markets. BITs and WTO rules are two prime examples.

4.4.1. BITs

BITs essentially operate to prevent host governments from making any changes to regulatory or fiscal frameworks that do not favour investors, thereby hindering host governments’ policy space and their ability to safeguard national interests. Older BITs signed in the 1980s and 1990s often favoured investors’ rights over issues such as sustainability, local value addition, and social rights (Tossou, 2025[111]). Mining companies have won significant compensation settlements against African countries when host governments have tried to revise their mining laws. An example is the International Centre for Settlement of Investment Disputes (ICSID) 2023 ruling in favour of a British nickel miner against the Tanzanian government, based on a 1994 UK-Tanzania BIT, which case was initiated after the Tanzanian government revised its mining code (Nachingwea and others v. Tanzania).

Host governments face much resistance when trying to revise terms of BITs – as a result, producing countries are increasingly resorting to cancelling BITs to give themselves more policy space to pursue national priorities. For example, Indonesia cancelled its BITs so that it could enforce its nickel ore export ban, and South Africa has replaced outdated treaties with national laws of general applicability (Tossou, 2025[111]).

4.4.2. WTO rules

GATT, TRIMS and SCM raise myriad obstacles to producing (developing) countries attempting to, for example, establish domestic mineral-based industries, to require mining companies to procure a share of their goods and services locally, or to control the rate of extraction or export of their minerals. While WTO rules supposedly advance ‘free trade’, their construction and implementation tend to favour consuming (advanced) countries and international corporations over producing countries attempting to develop local industry or better control extraction rates of their mineral wealth. For example, export restrictions almost always fall foul of WTO rules and producing countries have rarely satisfied the criteria needed for an exception to apply (as such criteria thresholds are notably high). A case in point was seen with Indonesia’s attempt to use an export ban on unprocessed nickel to enforce more sustainable extraction rates and establish a local stainless-steel industry – Indonesia’s interests were overruled in favour of EU claims that the European stainless steel industry would be adversely affected. International trade rules operate against African industrial ambitions and coming years may see African countries’ export restrictions challenged at the WTO, with outcomes unlikely to be in favour of African interests.