Gold Deals and Africa’s Resource Future: A Golden Opportunity or Missed Potential?

By Martin Mpukani

In January 2024, First Quantum Minerals sealed a landmark US$1 billion gold streaming agreement with Royal Gold, Inc., injecting fresh capital into Zambia’s beleaguered mining sector. Under the deal, Royal Gold will receive the right to purchase a portion of future gold production – specifically tied to copper output at the Kansanshi Mine, one of Africa’s largest copper-gold operations – in exchange for immediate liquidity.

On the surface, this innovative financing model is a win: it enables First Quantum to expand operations without equity dilution, while signaling renewed investor confidence in Zambia’s mining climate.

But beyond the headlines lies a more complex reality. As Africa stands at a crossroads of resource-driven transformation, such deals illuminate both the promise and peril of mineral wealth.

Streaming agreements, while attractive to companies and investors, often lock host countries into long-term commitments to deliver resources at fixed, below-market prices. When global commodity prices inevitably rise – as they have repeatedly over the past two decades – nations risk leaving billions in potential revenue on the table.

Zambia’s agreement is emblematic of a broader trend across the continent: a growing reliance on alternative financing mechanisms in mining, from streaming to royalty deals, as governments and companies seek to bridge capital gaps. These arrangements offer short-term relief but can undermine long-term fiscal sovereignty if not carefully governed.

The High Stakes of Alternative Mining Finance

Nowhere is this tension more evident than in Uganda. In early 2024, the Ugandan government announced the discovery of what it claims could be a US$12 trillion gold deposit – potentially one of the largest in history.

While the figure remains unverified by independent geologists and may be overstated, the announcement has ignited both hope and concern. If confirmed and responsibly managed, such a find could finance national infrastructure, catalyze industrialization, and create millions of jobs.

But history offers cautionary tales. From the Democratic Republic of the Congo’s cobalt mines to Nigeria’s oil fields, Africa’s resource wealth has too often enriched foreign investors and elite networks while leaving local communities impoverished and the environment degraded.

The so-called “resource curse” is not inevitable – but it persists where transparency is weak, contracts are non-negotiable, and benefit-sharing mechanisms are absent.

The real question is not whether Africa has resources – it does, in abundance. The critical challenge is whether African nations can harness these assets to build inclusive, sustainable economies.

Three Pillars for a Fairer Resource Future

To do so, three pillars must be strengthened:

1. Transparent Contracting: All mining agreements – including non-traditional deals like streaming – must be publicly disclosed. Citizens have a right to know the terms under which their national patrimony is being exploited.
2. Dynamic Fiscal Regimes: Tax and royalty systems must be indexed to market prices, ensuring governments capture a fair share during commodity booms. Windfall taxes, renegotiation clauses, and sovereign wealth funds can help insulate nations from volatility and ensure intergenerational equity.
3. Local Value Addition: Africa should move beyond exporting raw materials. Processing gold, copper, and cobalt domestically can multiply economic returns, create skilled jobs, and build industrial capacity.

Zambia’s deal with Royal Gold need not be a zero-sum transaction. With robust oversight and strategic reinvestment, it could fund critical upgrades at Kansanshi and beyond.

But it must be seen not as an end in itself, but as a test case for how Africa manages its mineral future.

From Extraction to Empowerment: Rethinking Africa’s Mineral Destiny

As global demand for critical minerals soars – driven by the clean energy transition and digital infrastructure – Africa’s role as a key supplier is undeniable. The continent holds over 30 percent of the world’s known mineral reserves, including vast deposits of cobalt, lithium, platinum, and gold.

Yet, for too long, the benefits have flowed outward. It’s time to flip the script.

The next chapter of Africa’s development should not be written in foreign boardrooms, but in African parliaments, communities, and innovation hubs. Deals like this one can be catalysts – but only if they are structured to serve national development, not just shareholder returns.

Africa doesn’t just need investment. It needs smart, fair, and sovereign investment – one that turns mineral wealth into lasting prosperity for all.

Martin Mpukani is a serial entrepreneur and the Founder & CEO of The Business Place Network, as well as the founder of AfriLeap Capital, a hybrid early-stage venture pipeline builder and impact finance partner focused on informal and climate ventures across Africa. He is dedicated to supporting entrepreneurs in low-income communities, empowering young people with limited opportunities, and driving scalable ventures that foster economic growth and social impact.