What's Happening?
The European Union and South Africa have entered into a significant agreement aimed at transforming the mineral supply chain dynamics between Europe and Africa. Announced in November 2025, the pact focuses on processing and adding value to African minerals
within the continent, rather than exporting raw ore. This agreement is part of the EU's Global Gateway program, which commits €750 million in new investments for infrastructure, clean energy deployment, and industrialization projects in Africa. The initiative aims to ensure that exported materials leave Africa as refined metals or precursor components, enhancing local economic benefits. This shift is driven by the increasing global demand for critical minerals essential for electric vehicles, renewable energy, and digital technologies.
Why It's Important?
This agreement marks a strategic shift in the EU's approach to securing supply chains for the energy transition, reducing reliance on Asian processing hubs. For Africa, the pact promises industrialization, job creation, and a fairer share of global mineral value. By focusing on local processing, African nations can retain more economic benefits and foster sustainable development. The collaboration also aligns with broader goals of clean energy transition and long-term resilience, integrating refining and processing capacity with clean energy infrastructure. This development could significantly impact global mineral markets and trade dynamics, offering a model for resource-rich nations to enhance value retention.
What's Next?
The agreement sets the stage for further discussions at the Invest in African Energy Forum in Paris in 2026, where stakeholders will address challenges such as structuring offtake agreements, financing models, and regulatory frameworks. The forum aims to turn high-level commitments into actionable roadmaps, outlining pathways for refining, precursor manufacturing, and clean energy integration. As the EU and African partners work towards implementation, the focus will be on ensuring transparency, accountability, and sustainability in mineral value chains. The success of this initiative could influence future EU-Africa collaborations and reshape global supply chain strategies.
