Africa looks to bonds to support wider mining benefits

Kojo Busia, a former coordinator of the African Minerals Development Centre, said using mines to anchor shared infrastructure reflects a central argument of the Africa Mining Vision, a continental framework adopted by African leaders in 2009 to use mineral wealth to drive broader economic development.

“The mine should be an anchor for building infrastructure,” Busia told Semafor. “Once infrastructure is built, it has to be used by multiple sectors… and not just be restricted to the mine alone.”

Mining is one of Africa’s biggest sources of exports and government revenue. But the disconnect between mining investments across Africa and economic benefits for local and national economies has created project risk, with disputes over land and benefit-sharing delaying developments and raising costs. Busia said competition for critical minerals is now pushing mining companies to link their investments more directly to development in producing countries. When the Africa Mining Vision first advanced that approach, Busia recalled, companies dismissed it as “resource nationalism” or argued that corporate social responsibility was enough. “There is some goodwill, but the game has changed,” he said.

The proposed DR Congo bonds are loosely modeled on a separate one being designed for Metalex, a mid-tier copper-cobalt developer in Zambia. The company is targeting the bond issue by year-end for a copper-cobalt project it is developing with Terra Metals in the northwestern mining town of Mwinilunga. The company plans to source 30% of its ore from local miners working legally within its licence area, with artisanal mining expected to receive the largest share of the financing. “Mine finance typically isn’t very happy with artisanal mining models,” Metalex CEO Ayo Sopitan told Semafor. The bond would provide a separate pool of capital for local miners and non-mining businesses around the site, he said.

Across Africa, infrastructure projects can have strong demand but still struggle to attract long-term capital. In my years of reporting in DR Congo, I have seen how often that happens. However, large mining projects here can attract financing on a scale that developers in other sectors rarely do. Mines, their contractors, and workers are already core customers for banks, telecom operators, cement producers, and other profitable businesses.

These sustainability-linked bonds could direct some of that financial weight into infrastructure. A road, logistics hub, or electricity grid may have many potential users, but lenders still want one large and dependable source of revenue at the outset. For power projects, for example, a long-term purchase agreement with a credible mining operator could provide just that. Households and local businesses can join once the system is operating, without being asked to carry the financing from day one. The mine will eventually close, but the country should still have the road, power system, or logistics asset.

Using sustainability-linked bonds to turn mines into anchors for wider economic development is not as straightforward as it might seem. Gautam Jain, who tracks global issuance, told Semafor that the main deterrent is the added cost of setting sustainability targets, monitoring performance and securing independent verification has not reliably translated into cheaper financing. “Is the cost and effort worth it?” he said.

Even then, financing alone cannot ensure mine-linked infrastructure benefits the wider economy. Perrine Toledano, research director at Columbia University’s Center on Sustainable Investment, said success depends less on the bond structure than on regulatory rules governing shared access, tariffs and disputes, as well as attracting enough additional users to make the infrastructure commercially viable.