Gold rush for green: Africa poised to seize opportunity for clean technology leadership
TO meet their green agendas, the European Union, United States, and China are in engaged in the modern-day equivalent of a gold rush.
This time, though, prospectors are not panning for shiny nuggets in Canada, America, or Australia. Instead, eyes are on the critical minerals of Africa — cobalt, graphite, lithium, and others — raw materials essential to the production of clean technology, including electric vehicles (EV).
To say Africa is generously endowed in this regard seems almost like an understatement.
Africa holds more than half of the world’s reserves of cobalt, 46 percent of its manganese, and 21 percent of its graphite, all used in EV batteries, and about a quarter of its bauxite, which is required for solar photovoltaic technologies.
Beyond reserves, mining and production are already in full swing in a number of countries.
Nearly 70 percent of all cobalt produced globally comes from the Democratic Republic of Congo (DRC) and that country is tied with Peru as number two behind Chile in the mining of copper, a key component in electric wiring.
Lithium, which has applications in everything from EV batteries to the lubricants that help wind turbines spin, is also being mined in the DRC, as well as in Zimbabwe and Namibia, while Ghana and Mali have lithium deposits that are not being exploited yet.
Namibia is also the world’s second-largest producer of uranium, which is used in nuclear energy.
Given the urgency of the energy transition, it is no surprise that the market for critical minerals and rare earth elements (a group of 17 light and heavy metals and alloys integral to the performance and efficiency of motors and turbines; there are 100 rare earth element deposit sites in Africa) is strong and growing.
For example, the International Energy Agency (IEA) predicts that as the world moves away from fossil fuels, manufacturers of clean energy technologies will require exponentially more critical minerals than they do today.
Specifically, the IEA says that by 2040 demand for lithium will be more than 40 times what it is now; over the same period, the need for graphite and cobalt will be 20 to 25 times higher. As far as copper, the expected expansion of the electric grid over the next 17 years means demand will likely double.
In short, opportunity abounds for Africa, especially considering the shortage of critical minerals nearly everywhere else — if we can only harness it.
This is a particularly timely topic as the 2023 United Nations Climate Change Conference (Cop28) wrapped up and voices around the globe continue to weigh in on what Africa should do (or not do) with its oil and gas.
For too long, Africa has allowed raw materials, including oil and natural gas, to be exported, meaning we have had no hand in the processes that happen next or the sale of finished goods.
As a result, we have missed out on the job creation, industrialisation, and economic diversification that downstream development represents, not to mention the money that comes with it.
It is just an economic fact of life that processed materials command a premium price compared to raw materials.
To take full advantage of the critical minerals beneath our feet, we must break free from our “mining only” mindset. The value chain does not have to stop with extraction.
There is an argument that minerals should be manufactured into products closer to where they will be used, and that Africa lacks, for example, both the manufacturing capacity to turn cobalt into EV batteries, and the market for EV cars. (Young African entrepreneurs have taken aim at this deficit, as you will see in a moment.)
But with sufficient investment and collaboration, we can build capabilities and catalyse the market.
The good news is that we are seeing progress in that direction.
In April 2022, the DRC and Zambia signed a co-operation agreement to make EV batteries in Katanga province, the mineral-rich region where Tenke Fungurume is located. That was followed in December by the US entering into a trilateral memorandum of understanding (MOU) with those countries to develop a complete value chain around EV batteries, “from extraction to the assembly line”.
To move the deal along, the African Export-Import Bank (Afreximbank) and the United Nations Economic Commission for Africa (Uneca) are helping the DRC and Zambia form special economic zones (SEZ) for the production of battery precursors, batteries, and EVs.
According to the United Nations, “the Afreximbank and Uneca will play a central facilitating role, acting as the project’s financial and technical partners respectively.
In addition to Toyota setting up shop in Durban, South Africa, to assemble hybrid EVs from “semi-knocked down” imported vehicles and Uganda’s Kira Motors converting internal combustion engine-powered buses into EVs, a small industry of EV motorcycle manufacturers has cropped up in Rwanda, Nigeria, Uganda, Kenya, and South Africa, potentially accelerating the growth of a much-needed domestic market and circumventing the need for the expensive, grid-scale charging infrastructure fourwheeled vehicles require.
These companies are building EV motorcycles from the ground up and subbing EV motors for conventional ones in existing bikes. As Marit Kitaw, interim director of the African Minerals Development Centre (AMDC), noted, this is evidence that “the continent’s technical and manufacturing capabilities can be scaled up with supportive policies, skill-building programmes, infrastructure development, and a favourable investment climate.”
While agreements like those between DRC and Zambia are a start, our nations must collaborate more closely, especially when it comes to issues like establishing a common external tariff (CET).
That would serve to avoid a patchwork approach to imports and make it easier for African countries to do business across borders.
We have to build up our energy infrastructure so we can support processing and refining.
We must avoid the human-rights violations that have plagued other extractive industries in Africa, ensuring workplaces are safe; indigenous people are not at risk; workers’ living conditions meet universally accepted standards; the physical environment is protected; and children are not put to work when they should be in school.
As the world pivots to a low-carbon future, Africa has a chance to change where we sit on the critical minerals value chain and, in turn, to change our destiny. But there is tremendous work to do, and it has to be done right. With the right partners and support, within our continent and worldwide, it will be. — bizcommunity.com
*NJ Ayuk is the executive chairman of the African Energy Chamber.