Africa Has the Minerals. Prosperity Is Another Matter – by Louis-Nino Kansoun (Ecofin Agency – June 9, 2026)

Key Takeaways

• Sumitomo abandons Madagascar’s Ambatovy nickel project after 20 years.
• Ambatovy held billions of dollars in investment and world‑class nickel reserves.
• Africa’s lithium, cobalt, copper, graphite, nickel are critical for EV batteries.
• Past resource booms in Africa have not delivered sustained economic growth.
• Diversified policies, not minerals alone, are needed for African prosperity.

Pulse Analysis

Sumitomo Corp.’s withdrawal from the Ambatovy nickel operation marks a rare public acknowledgment of the challenges facing large‑scale African mining projects. After more than 20 years and billions of dollars poured into the site, the Japanese conglomerate cited cost overruns, logistical hurdles, and a shifting global price environment. The decision not only jeopardizes local employment and tax revenues in Madagascar but also sends a cautionary signal to other multinational miners eyeing the continent’s deep‑seated deposits.

At the same time, Africa sits atop a new wave of strategic minerals—lithium, cobalt, copper, graphite and nickel—that power electric vehicles, renewable‑energy storage and a host of clean‑tech applications. Global demand for these commodities is surging, prompting governments and investors to view the continent as a pivotal supply hub. However, the race to secure contracts often overlooks the fragile infrastructure, regulatory uncertainty, and community concerns that can stall projects. The Ambatovy episode illustrates how even well‑funded ventures can falter when local conditions and market dynamics clash.

The broader lesson is that mineral endowments are not a shortcut to development. Historical cases—from oil‑rich Nigeria to diamond‑laden Botswana—show that without transparent governance, value‑adding processing, and diversified economies, resource wealth can become a curse rather than a catalyst. African policymakers must pair resource extraction with investments in education, manufacturing and fiscal reforms to retain more value domestically. For investors, the takeaway is clear: successful engagement in Africa will require a holistic approach that balances resource access with robust risk‑mitigation strategies and long‑term partnership models.