Spotlight On The Businesses Driving Mining’s Full Potential Beyond Extraction
Mining in Africa has long been the cornerstone of economic development across the continent, but discussions about the industry often focus on large-scale extraction. However, the shift in perspective is attracting attention, highlighting the importance of downstream industries in shaping more sustainable and valuable industries. In addition to raw material exports, companies involved in oil refining, processing, logistics and supply chain integration prove that it is crucial to unlocking Mining’s long-term economic interests.
According to the African Development Bank, Africa is home to 30% of the world’s mineral reserves, but when raw materials are exported without adding value, most of its economic benefits are lost. Increasingly, the shift toward benefits, processing and mining-related services is seen as a way to support sustainable industrial growth while capturing more value locally.
“When we interacted with more SME customers on this year’s mining Indaba, we realized that a lot of work can be done through collaborative efforts, which could lead to huge results for South Africa by properly supporting the existing downstream service environment, thus bringing huge results to South Africa by properly supporting the existing downstream service environment. Abe Andries, head of commercial and commercial banking operations and commercial banking mining at Standard Bank of South Africa, said.
Mineral-rich economies across the continent are more concerned with converting raw materials into refined products, supply chain efficiency and infrastructure investments to support these industries. Strengthening these areas is seen as enhancing Africa’s role in global trade and ensuring lasting economic impacts from mining.
In South Africa, the mining industry contributed about R20.25 billion to GDP in 2023. Across the continent, the African Continental Free Trade Area (AFCFTA) is expected to enhance trade in processing and fine minerals, creating more opportunities for local industries.
Despite this potential, businesses involved in logistics, beneficiaries and processing are still receiving challenges in accessing capital and trade financing. Strengthening the financial ecosystem, expanding trade facilitation and integrating digital banking solutions is crucial to ensuring that these businesses can be expanded.
A fully functional mining industry is where businesses throughout the value chain can use the right financial tools, trading platforms and strategic partnerships. As the McKinsey report shows, as mining operations across multiple countries span multiple countries, effectively moving products across borders and industrial sectors to key factors in long-term sustainability.
For Andris, “the downstream mining sector is an important driver of African economic transformation. In addition to extraction, businesses in the refining, transport and supply industries can create jobs, industrialization, and stronger trade relations. As a bank, we Committed to supporting these businesses by providing relevant and targeted products and solutions to help them get started, manage and grow operations. With our deep understanding of the mining value chain and the industries that power them at Standard Bank, we Make the possibility an opportunity for vibrant businesses that drive the African economy.”
Financial institutions play a key role in supporting and providing financing solutions targeting the needs of businesses throughout the mining value chain. Access to structured trade financing, working capital and cross-border payment solutions that enable businesses to scale, invest in sustainable operations and integrate into global supply chains. In an increasingly digital world, financial technology and digital banking platforms also enable mining suppliers, refineries and logistics companies to operate more effectively, manage liquidity and navigate international markets.
The mining sector in Africa is growing, with industry leaders, policy makers and businesses increasingly focused on how to capture more value within the continent, rather than simply exporting raw materials. More collaboration between private and public sector players is expected to shape a more integrated and competitive mining value chain that benefits not only the mining expertise but also the businesses that are processing, supplying and maintaining the industry.
Many of our interactions with our clients this year are a key insight to provide world-class financial services to the mining industry in the SME market, and our deep understanding of the industry is crucial. Therefore, we are committed to getting closer to these customers and deepening our understanding of SME mining and its complexity.
As global supply chains shift, Africa positioned itself as a leader in mineral philanthropy and trade integration, ensuring downstream markets are fully integrated into industry decisions is becoming an increasingly important dialogue.
The growing momentum behind the development of local supply chains is highlighting the opportunity for mining, not just extraction-driven sectors, but the long-term driver of industrial and economic growth.
