Africa’s ambition to capture more value from its mineral wealth is gaining momentum as Burkina Faso, Ethiopia, Zambia, and the Democratic Republic of Congo (DRC) invest in local gold-refining facilities, seeking to move beyond exporting unprocessed gold for processing abroad.
The investments come amid a rally in international gold prices, which has increased the value of the continent’s mineral resources and strengthened the economic case for retaining more of the proceeds within domestic economies.
Data from the World Gold Council shows that the metal climbed to a record $5,595 per ounce in January 2026 before retreating to around $3,946.2 on Friday at 1 pm as expectations of higher US interest rates and a stronger dollar weighed on the metal. Despite the correction, prices remain substantially above their 2023 average of about $1,955 per ounce.
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The rally has also increased the value of gold held by African central banks. A BusinessDay analysis of WGC shows that the combined dollar value of reserves held by eight African countries — South Africa, Nigeria, Ghana, Mauritius, Algeria, Egypt, Morocco and Kenya — rose by 113.5 percent to $66.6 billion in the second quarter of 2026 from $31.2 billion in the corresponding period of 2023.
However, physical holdings rose only marginally, from 505 tonnes to 509.2 tonnes over the three years, suggesting that higher bullion prices, rather than substantial new purchases, drove most of the valuation gain. Algeria held the largest reserves by value at $22.5 billion, followed by Egypt at $16.8 billion and South Africa at $16.3 billion.
Gold’s growing importance to central banks reflects its ability to diversify foreign reserves, provide a store of value during geopolitical uncertainty, and reduce exposure to assets tied to another country’s financial system. Unlike foreign currency securities, gold is not a liability of another government or financial institution, although it generates no interest and remains exposed to market price fluctuations.
For African economies, stronger gold reserves can improve the composition and reported value of external assets, support confidence in reserve adequacy and provide a buffer against financial shocks.
However, higher valuations do not automatically translate into additional foreign exchange for imports, debt servicing or currency support. The broader opportunity lies in combining gold production with formal trading, local refining and stronger export earnings.
Africa accelerates investment in gold refining
The latest investments reflect this ambition. The DRC launched its first pilot gold refinery, DRC Gold Refinery S.A., in Kalemie on March 11, with an estimated capacity of 500 to 600kg monthly.
Burkina Faso inaugurated RAFFINOR-BF in September, with an initial annual capacity of 164 tonnes and plans to expand to 515 tonnes. Ethiopia launched a $50 million precious metals refinery in October, with the capacity to process more than 600 tonnes of precious metals annually, while Zambia unveiled a new refinery developed by Minera Refineries Zambia Limited on October 25.
These investments signal an effort to move African economies beyond an extractive model, in which much of the value is captured after minerals leave the continent, towards industrial production that includes processing, refining and eventually manufacturing.
This is significant for a continent whose mineral resources have historically supplied industries in wealthier economies, while much of the higher-value activity, technology, financing and trading has remained outside its borders.
However, establishing refining capacity does not automatically guarantee access to international bullion markets or ensure that African producers capture a greater share of the industry’s value.
International certification remains a major hurdle
Sikiru Haruna, mines manager at Segilola Resources Operating Limited, said the distinction between gold processing and refining was important in assessing the continent’s progress.
Processing extracts gold from ore to produce doré bars containing gold, silver and other metals, while refining removes the remaining impurities to produce higher-purity bullion.
“Modern refining technologies are capable of producing high-purity gold. Miller chlorination typically produces gold of around 99.5 percent purity, while Wohlwill electrolysis and suitable chemical refining processes achieve 99.99 percent or higher. However, technical capability and market recognition are separate issues. A refinery producing 99.99 percent gold does not automatically qualify for inclusion on the London Bullion Market Association’s Good Delivery List,” Haruna said.
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The LBMA Good Delivery List is a major benchmark in the international wholesale bullion market, with requirements extending beyond purity to technical competence, consistent product quality, financial standing and responsible sourcing.
South Africa’s Rand Refinery, established in 1920, provides an example of an African operation with international recognition.
Haruna said newer refineries must invest in reliable laboratories, independent assaying, traceability systems and international partnerships to establish similar confidence.
Every gold consignment, he said, should have verifiable records of its origin, ownership and movement, particularly where supplies come from artisanal and small-scale mining.
Financing and reliable supplies threaten commercial viability
Beyond certification, access to financing could determine whether new African refineries operate profitably.
A refinery must purchase gold before processing it, creating substantial working-capital requirements. Haruna illustrated this with the cost of purchasing 100kg of gold at an assumed $100,000 per kilogram, which would require $10 million before insurance, transport, security and operating expenses.
Affordable credit, gold-backed financing and strong banking relationships are therefore essential to sustaining operations.
André Lourens, mining economist at KPMG South Africa, said Africa’s principal challenge was commercial rather than technological, as buyers and financiers would need reasons to use new facilities instead of established centres such as Switzerland.
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“African refineries can meet the same technical and certification standards as refineries elsewhere. The more important question is commercial: if you invest heavily in new refining capacity in Africa, will producers and buyers choose to use it rather than established refining centres such as Switzerland?” Lourens said.
He added that investors would assess reliable gold supplies, customer demand, infrastructure, security, regulatory stability and the returns available on substantial upfront capital.
Lourens also warned that illegal mining, corruption and exploitative labour practices could undermine international acceptance, making responsible sourcing and predictable regulations essential to attracting long-term investment.
Building a trusted African gold market
For Uche Chijioke, head of operations and administration systems at Kian Smith, African countries must complement individual refinery investments with a trusted regional gold market, supported by consistent quality, traceability, recognised standards and stronger relationships with international buyers.
“The goal is for African-refined gold to be trusted and traded directly in international markets, without having to rely on established refining and trading centres outside the continent,” he said.
The opportunity extends beyond producing more gold. If African countries can formalise production, refine locally, expand jewellery and other manufacturing industries, and retain more export earnings, the sector could support industrial jobs, technology transfer, stronger public revenues and more diversified foreign exchange sources.
But the transition will depend on whether new facilities can secure legitimate supplies, achieve international recognition and attract sustained commercial demand. Without these conditions, Africa risks adding refining capacity without fundamentally changing where the economic value from its gold industry is captured.
Faith Omoboye is a foreign affairs correspondent with background in History and International relations. Her work focuses on African politics, diplomacy, and global governance.
