By Sharon Mdaka
Africa’s mineral wealth continues to attract global attention as demand for copper, lithium, cobalt and other critical minerals grows. Yet for many junior mining companies, discovering an economically viable deposit is only the beginning of a far more difficult journey.
Thomas Holtz, CEO of the Multotec Group.
Supplied by Multotec
According to Thomas Holtz, CEO of the Multotec Group, the biggest obstacle facing junior miners today is not a lack of mineral resources, but the ability to develop projects in environments where infrastructure, skills and investment are uneven across the continent.
He emphasised that each country in Africa has its own challenges. Speaking during the Junior Indaba, Holtz stressed that mining conditions differ across the continent between jurisdictions, with factors such as infrastructure, commodity type, regulation and local capabilities shaping the success of individual projects.
“There is a different need for industrial minerals than, let’s say, precious metals such as diamonds and gold. You must gear yourself up with what is available in the region,” he explains.
While Africa hosts some of the world’s richest mineral deposits, Holtz believes infrastructure continues to separate projects that reach production from those that struggle to attract investment. He says that challenges are varied. “It’s infrastructure, it’s skills. Do I have power? Do I have a road? Can I accommodate my people?” Unlike major mining houses that have the financial capacity to invest in supporting infrastructure, junior miners often lack the capital needed to overcome these barriers. “The bigger guys have got the deep pockets to invest in the infrastructure. The junior miners won’t,” he says.
As a result, smaller companies continue to face additional costs associated with generating electricity, securing reliable water supplies and establishing access routes before mining activities can begin. “The hurdle rates get higher if you must generate your own electricity, if you must go and find your own water. It becomes harder to operate as a junior miner.”
These challenges are evident across several emerging mining regions, where infrastructure development has yet to keep pace with mineral exploration. Holtz points to the Lobito Corridor as an example of infrastructure that could improve regional competitiveness by providing a more efficient export route for copper from the Central African Copperbelt.
Beyond infrastructure, financing remains another critical hurdle for junior miners. According to Holtz, investors often expect returns well before projects can generate sustainable revenue. “How long does it take to develop, produce ore, refine it and make money out of it?” he asks. “There might be a timing issue.” Drawing on Multotec’s own experience expanding into developing markets, he says businesses require patience before investments begin producing meaningful returns.
“We feel that if we set a branch up in a developing economy, it does take a few years to establish, start seeing some revenue, but seeing profitable revenue is something that takes a substantial amount of time, five years or more,” he shares. This long investment horizon can discourage investors seeking quicker returns, creating another obstacle for junior mining companies attempting to move projects beyond the exploration phase. “I think the financiers want to see a return,” Holtz says.
Despite these challenges, he remains optimistic about Africa’s long-term mining prospects. He believes global demand for critical minerals presents one of the continent’s greatest opportunities. “There are still fantastic growth opportunities in the African continent.” He attributes much of the growing international interest to efforts by Europe and North America to diversify supply chains.
“This reclassification of the critical minerals suddenly becoming a priority, particularly in Europe and North America, is because the Chinese have locked up the supply chain to a large extent.” Demand for battery minerals such as lithium, copper and cobalt continues to strengthen as countries accelerate the energy transition and electric vehicle production. Holtz believes Africa is well positioned to become a major supplier, provided governments continue creating investment-friendly environments.
Although geological potential remains important, Holtz says policy certainty plays an equally significant role in attracting mining investment. Among African jurisdictions, Zambia stands out as one of the stronger performers. “I think the new president has been business-friendly and created an environment that attracts investment,” he says. Multotec recently expanded its own presence in the country with the opening of a new manufacturing facility in Zambia’s Copperbelt. Conversely, policy uncertainty can quickly undermine investor confidence.
He also points to Mozambique’s political instability as an example of how uncertainty affects investment decisions, while noting that such conditions create challenges for all companies operating in the market. He also highlights localisation requirements in some jurisdictions as a growing consideration for equipment manufacturers.
“We’re a South African manufacturer. We want to grow our South African operations and ship product out of South Africa, but then we’re forced to start manufacturing locally.” While supportive of local economic development, he says localisation policies need to remain commercially viable. “It often isn’t viable for us because you don’t get the scale. Then you compete against the Chinese supplier who brings the stuff in out of China, and there they have scale.”
Holtz also states that commodity prices remain a major driver of mining investment decisions. Record gold prices have improved the economics of operations across the continent. “With the high gold price, our marginal mines now suddenly become very viable.” The opposite has occurred within the diamond sector. “The low price in diamonds has put huge pressure on most, if not all, diamond operations across Africa,” he says. Several operations have entered care and maintenance or reduced production while waiting for market conditions to improve.
As mining projects become more technically complex, he is of the view that equipment suppliers are playing a broader role than simply delivering products. “Our expertise and our specialists are almost advisors,” he says. The company’s engineers and metallurgists regularly assist customers in optimising processing plants, improving plant performance and adapting equipment to changing ore characteristics.
“If they have processing issues, we’ll advise and support. We might even re-specify equipment if there’s a change in the ore body.” In some cases, suppliers are even helping projects overcome financial constraints. Holtz cites an example in West Africa where the company offered to pre-finance plant repairs, allowing the mine to resume production before repayment.
“We’ve offered to pre-finance a project on our side to allow them to start generating revenue. Once they’ve done that, we can then be paid.” He emphasises that successful mining development extends beyond technical capability. Whether establishing a new branch or supporting an existing operation, he believes companies must become part of the communities in which they operate. “We start embedding ourselves into that community. We try and skill up and train local people. And use local subcontractors. We often get involved with local community projects.” For Holtz, maintaining a social licence to operate is just as important for suppliers as it is for mining companies. “I think it’s important that social licence to operate applies to any business.”
While Africa’s mining landscape presents challenges, he believes the continent’s long-term outlook remains positive. Critical minerals, improving infrastructure and growing investment in processing capacity position Africa to play a larger role in global mineral supply. “We’re quite excited about the African growth,” he says.
“We think the possibility to play a role and become a supplier of critical minerals for the world is something we want to be part of.” For junior miners, however, success will depend on more than discovering world-class ore bodies. Access to infrastructure, patient investment, supportive government policies and strong community partnerships will determine which projects make the transition from exploration to profitable production.