Constrained global supply chains, increasing operational costs, changing commodity prices, policy recalibration, political risk, and the push for sustainable transformation with rising global demand for the continent’s resources are all issues currently facing investors in the mining and energy sector in Africa. These challenges have resulted in some notable M&A activity, numerous legal developments, and an energy market transformation that is helping to boost the continent’s role in the global resource economy.
Mining
The African precious metals sector continues to experience increased consolidation and valuation-driven dealmaking, with companies divesting non-core assets to optimise portfolios and focus on high-return operations.
For example, the African copper industry is seeing accelerated growth, driven by global demand for energy transition and technological advancement, with significant M&A activity in Zambia and Botswana reshaping the continent’s role in the global supply chain. Platinum group metals are also rebounding, driven by rising demand for hybrid vehicles and constrained global supply. This benefits players in this space, despite the demerger costs.
South Africa
In 2025, investment in the South African mining sector was marked by two notable M&A deals that focused on corporate restructuring and balance sheet optimisation – the demerger of Anglo American Platinum (now Valterra Platinum) from the Anglo American group, and the implementation of its secondary listing on the London Stock Exchange, and the hedging collar transaction of African Rainbow Minerals’ equity in Harmony Gold Mining Company.
Legal reforms
South Africa is currently advancing a major regulatory reset in the mining sector, with the Draft Mineral Resources Development Bill now in the process of considering public consultation, and the Critical Minerals and Metals Strategy formally adopted. If the final framework aligns with stakeholder expectations, these reforms could deliver the policy certainty needed to strengthen investor confidence across the sector.
Energy
Similarly, Africa’s energy landscape continues to evolve rapidly, marked by liberalisation, regulatory reform, rising tariffs, and a surge in renewable energy investments.
M&A activity in the sector has seen a nuanced shift. While the overall deal volume in Europe, the Middle East and Africa declined, linked to lower energy prices, higher capital costs and reduced appetite for minority stakes, this has been offset by a rise in African oil and gas transactions, and potential for future activity driven by renewables and major takeovers. Renewables continue to be at the heart of South Africa’s energy transition. In addition to increased activity in the captive power space over the last few years, and the emergence of trading and aggregating platforms due to relaxed licensing requirements relating to the direct sale of power, new legislation and proposed draft regulations are paving the way for a fully transparent and open market.
With the initial foundations laid, South Africa’s electricity market has moved decisively into its next phase of reform. The draft Market Code released in 2024 set out the framework for day ahead and intraday trading, and 2025 saw significant progress toward operationalising this competitive market structure.
A major milestone was reached in November 2025 when NERSA approved the Market Operator licence for the National Transmission Company South Africa (NTCSA), formally empowering the entity that will administer the future trading platform and oversee the implementation of the Market Code and Market Rules. NERSA also approved the Grid Capacity Allocation Rules, introducing a transparent, non discriminatory framework for accessing scarce grid capacity, which is one of the most critical enablers for new renewable energy projects.
These developments strengthen the regulatory architecture required for a competitive wholesale electricity market, which remains on track for full operation by 2031. Regionally, momentum within the Southern African Power Pool (SAPP) continues to build, with growing interest in cross border power purchase arrangements and increased participation by utilities and private traders. This reflects a broader shift toward regional integration and diversified power trading across Southern Africa.
ESG
ESG factors have evolved from a disclosure exercise into a core value driver in South Africa: acquirers are integrating energy self-generation capacity, carbon exposure, water resilience and supply-chain localisation into valuations and post-acquisition integration strategies. The Government’s Just Energy Transition Investment Plan (2023-2027) continues to drive consolidation in the renewable energy sector, as businesses capitalise on decarbonisation imperatives and grid reliability needs. Institutional investors and non-institutional players are driving event-focused campaigns on value extraction and governance.
Coal remains a cornerstone of South Africa’s energy mix, and is still in high demand globally. According to S&P Global Energy, Richards Bay Coal Terminal was on track to export 55 million tonnes of coal in 2025; however, a recent high court ruling against new coal-fired power authorisations underscores the growing environmental pressure in the space.
Future outlook
As Africa’s mining and energy sector navigates complex operational challenges and rising global demand for its resources by reforming its regulatory frameworks, transforming its energy markets and deepening its sustainability commitments, a new wave of investment opportunities in this sector is being unlocked across the continent.
Alessandra Pardini is Head of Projects, Energy and Infrastructure and Ntokozo Nzima a Partner | Bowmans
This article first appeared in DealMakers, SA’s quarterly M&A publication.
DealMakers is SA’s M&A publication.
www.dealmakerssouthafrica.com
