The Africa Finance Corporation (AFC) plans to launch a dedicated mineral exploration investment company within the next 12 months to address Africa’s exploration funding gap and support the discovery of new mineral reserves, the pan-African development finance institution said.

The proposed investment vehicle is intended to strengthen domestic mineral production and give African countries greater control over the development of their natural resources, AFC officials said at African Mining Week in Cape Town.

Franklin Edochie, AFC’s deputy director and head of the Metals and Mining Desk, said investment in exploration was necessary to support efforts to process more minerals locally rather than export them primarily as raw materials.

“If we don’t invest in African exploration, we risk losing control over where our resources end up,” Edochie said, according to the announcement distributed by Energy Capital & Power.

The planned Africa Finance Corporation mineral exploration fund would address an important stage of the mining industry: identifying and establishing commercially viable deposits before the development of operating mines.

Exploration funding gap

Mineral exploration requires substantial upfront spending on geological surveys, sampling, drilling and resource assessment. These activities can take years to establish whether a deposit contains sufficient quantities of minerals to justify commercial development.

Projects at this stage can be difficult to finance because they carry geological and commercial risks before producing revenue. Limited access to capital can leave potentially valuable deposits undeveloped or delay their progression towards production.

AFC said the proposed vehicle would help close Africa’s mineral exploration funding gap by supporting the identification and definition of new reserves.

Edochie said exploration was central to the institution’s investment priorities because local processing and value addition depend on discovering and establishing additional mineral resources.

Local processing and value addition

The proposed investment company comes as African governments seek to retain more economic value from their mineral resources by encouraging domestic processing and the development of industries linked to mining.

Mineral-producing countries often export ores and concentrates for processing elsewhere, limiting the share of downstream industrial activity taking place within their economies.

Expanding local processing can create opportunities in manufacturing, employment and supporting infrastructure, although its viability depends on factors including electricity costs, transport links, technology and access to markets.

AFC has linked exploration investment to this broader industrial strategy. Discovering new deposits and establishing reliable estimates of their resources can help underpin decisions about mines, processing facilities and related infrastructure.

However, exploration funding alone cannot guarantee that mineral discoveries will become operating mines or support domestic manufacturing. Projects must also secure permits, infrastructure, commercial financing and buyers for their output.

The availability of reliable and affordable power is a particular consideration for energy-intensive mineral processing industries.

AFC said it was also seeking to expand investments in regional ports and power corridors to support industrial areas, including the Copperbelt, Edochie said at the mining event.

The Copperbelt, which spans parts of Zambia and the Democratic Republic of Congo (DRC), is an important centre for copper and other mineral production. Infrastructure investment can help connect mining areas to transport networks, electricity supplies and export markets.

Democratic Republic of Congo seeks more geological data

The DRC is among the countries seeking to improve its understanding of its mineral resources and attract investment into exploration and mining.

Freddy Mwamba Kanyinku, director general of the DRC’s Centre d’Expertise, d’Evaluation et de Certification (CEEC), highlighted the country’s geological mapping programme during the discussions at African Mining Week.

Kanyinku said high-precision geological mapping had been completed for 19% of the country’s territory, according to the announcement. He said the government was working to modernise geological evaluation and improve the information available to potential investors.

“Eighty percent of our land remains unexplored,” Kanyinku said, describing the scope for further exploration and international investment.

He also said modernising geological assessment was changing how investors could engage with the country, allowing them to approach the DRC directly rather than relying on intermediaries abroad.

Better geological information can help investors assess the location, scale and potential quality of mineral deposits before committing substantial capital. It can also help governments make more informed decisions about mineral development and infrastructure planning.

Nevertheless, unexplored territory does not automatically translate into commercially recoverable mineral reserves. Exploration must establish the presence, quality and economic viability of deposits before they can be developed.

Competition for critical minerals

Africa’s exploration plans are unfolding amid growing international competition for minerals used in energy systems, advanced manufacturing and other industrial applications.

Copper is essential to electrical infrastructure, while other minerals are used in batteries, renewable energy equipment and industrial technologies. Demand prospects and supply-chain considerations have encouraged governments and companies to seek more diversified sources of these materials.

That requires more than identifying mineral deposits. Transport infrastructure, power generation, regulatory certainty, skilled labour and access to financing all influence whether projects can advance from exploration to production.

AFC’s proposed investment vehicle would focus on the exploration stage, while its infrastructure activities are intended to support the wider development of mineral and industrial projects.

The institution has also identified additional opportunities in Africa’s mining sector. In October, Edochie said AFC was looking at potential investments in iron ore and uranium as it expanded its activities across the continent’s mineral industry.

AFC already has interests in commodities including gold, bauxite, copper and manganese, according to reporting on its mining strategy.

Implementation will determine impact

The effectiveness of the Africa Finance Corporation mineral exploration fund will depend on its ability to mobilise capital, select viable projects and support exploration in countries where geological information and access to financing remain limited.

Its investment approach will also help determine whether funding reaches early-stage projects that struggle to attract commercial investors or is concentrated in deposits with a clearer path towards development.

The planned launch within 12 months provides a broad timetable, but AFC has not yet announced a detailed implementation schedule or named initial beneficiaries.

The proposal therefore represents a planned financing initiative rather than a fund with publicly disclosed capital commitments and operating investments.