Finance or Folly? How Climate Capital Is Fueling Mining Abuses in Africa

In recent climate weeks, the buzzwords were everywhere: “green capital,” “just transition,” “unlocking climate finance.” On panels, participants nodded in agreement about the trillions needed to accelerate the energy transition. Yet, thankfully, one recent report cut through the spin: Forests & Finance had traced the flow of “climate-aligned” capital into mining projects that are tearing through African landscapes, uprooting communities, and endangering lives.

In the Global North, climate finance is often portrayed as a saviour; it is investments that make electric cars, wind turbines, and solar grids possible. But in much of Africa, those same flows come wrapped in displacement, exploitation and deforestation. It was a reminder of something I’ve seen up close in mining communities: the rhetoric of “development” can become a licence for abuse when justice is absent.

The real question, then, is this: are we financing a just transition, or subsidising a new wave of extractivism dressed in green?

The lure of minerals and the cost borne by Africa

Africa indeed sits on the minerals that underpin the world’s clean energy future. Cobalt, lithium, manganese, rare earths, etc, and without them, batteries won’t run, turbines won’t spin, and grids won’t store renewable power.

But the truth is, Africa is not just supplying minerals. It is shouldering the human and ecological costs of extraction, while the lion’s share of profits flows elsewhere.

The Forests & Finance report revealed that global banks and institutional investors continue to pour billions into companies whose mining operations in Africa are linked to:

• Deforestation, wiping out biodiversity and ecosystems vital for climate resilience.
• Community displacement, where villages are uprooted to make way for pits, tailings dams, and access roads.
• Labour abuses, especially in artisanal mining, where children are involved in hazardous work.

This is climate finance in its rawest contradiction: the money that builds clean energy abroad can destroy the very resilience Africa needs at home.

A haunting paradox: clean for the North, dirty for the South

When I speak with colleagues in policy forums, the paradox is almost always clear. “We are decarbonising Europe’s cars on the backs of Congolese children,” one activist told me bluntly in Addis Ababa. She wasn’t exaggerating.

Cobalt mining in the Democratic Republic of Congo, for example, supplies over 70% of global demand. Yet studies have documented cases of child labour, toxic exposure, and deaths in unregulated artisanal mines. Meanwhile, financial institutions in New York, London, and Paris continue underwriting the companies that dominate these supply chains.

The outcome is stark: the North gets clean cars and batteries; the South inherits poisoned rivers and broken communities.

This is not an accident. It’s the result of financial systems that prioritise mineral access over human rights.

When finance ignores justice

The defenders of these investments often point out that mining is “necessary.” After all, the world cannot electrify without minerals. But what they rarely admit is this: mining is only as destructive as the governance and finance systems that enable it.

If financiers demanded robust environmental safeguards, community consent, and fair contracts as preconditions for their capital, the story would be different. But too often, due diligence is reduced to checklists: box-ticking exercises that allow money to flow regardless of abuses on the ground.

In Africa, where governance institutions are already stretched, this creates a dangerous vacuum. Mining companies backed by international banks face little accountability. Communities have no leverage. Civil society is left to pick up the pieces.

Finance, in other words, is not neutral. It either enforces justice or subsidises injustice. Right now, much of climate finance is doing the latter.

Who pays the real price?

Behind every tonne of cobalt or lithium shipped abroad, there are real people bearing costs. I’ve spoken with women in mining zones who describe how rivers they once relied on for farming are now contaminated. I’ve met young men who left school to risk their lives in artisanal pits, only to earn a fraction of what the minerals are worth once refined.

The irony is cruel: Africa’s minerals are making clean energy affordable elsewhere, while energy access remains out of reach for millions on the continent itself. The injustice is not just economic; it’s existential.

What must change: from folly to justice

If climate finance is to avoid becoming folly, it must be transformed. Three shifts are urgent:

1. Grant-first, not debt-first. Too much “green capital” arrives as loans that burden African governments. Adaptation and resilience require grant-based finance, not new debt traps.
2. Justice in the deal. Every financing package must embed strong social and environmental safeguards: free, prior, and informed consent; gender-sensitive policies; and enforceable accountability mechanisms.
3. Value at home. Instead of financing only extraction, capital must support African refineries, battery plants, and renewable industries. Minerals should power Africa’s development as much as they power global transitions.

These are not radical demands. They are basic conditions for a transition that is genuinely just.

A turning point for Africa

The AU-led coalition on critical minerals and voices like Mo Ibrahim’s call to “unlock Africa’s green riches” suggest a shift in ambition. Africa is no longer content to be a quarry. But ambition must be matched with vigilance.

Civil society, governments, and partners must insist that finance flows respect justice. Otherwise, Africa will once again be left with the worst of both worlds: exploited resources and underdeveloped economies.

The clean energy transition should be a chance to rewrite history, not repeat it.

Conclusion: finance or folly?

As I reflect on the debates and promises made in the recent climate weeks, I keep returning to that uncomfortable truth: the clean energy revolution cannot be built on the backs of Africa’s dispossessed.

If financiers want to claim they are accelerating a just transition, they must prove it in Africa, where the minerals are mined, where the communities live, and where the stakes are highest. Anything less is not finance. It is folly.

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