How Africa can benefit from critical minerals
TO meet their green agendas, the European Union, United States, and China are engaged in the modern-day equivalent of a gold rush. This time, though, fortune seekers aren’t panning for shiny nuggets in Canada, America, or Australia. Instead, all 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 that 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 aren’t 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 20-25 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) wraps up and voices around the globe continue to weigh in on what Africa should do (or not do) with its oil and gas.
If we’re going to be honest, we must admit that we don’t always have the best track record when it comes to turning resource wealth into actual wealth for our people. But I believe we can break away from that pattern.
Out of our hands
For too long, for lack of will and domestic policy, we’ve allowed our raw materials, including oil and natural gas, to be exported, meaning we’ve had no hand in the processes that happen next or the sale of finished goods.
As a result, we’ve missed out on the job creation, industrialisation, and economic diversification that downstream development represents, not to mention the money that comes with it: It’s just an economic fact of life that processed materials command a premium price compared to raw materials.
Consider the DRC’s massive cobalt and copper mine, Tenke Fungurume, which has been in production since 2009 and is projected to have 32 years’ worth of reserves.
China Molybdenum Co. (CMOC), the world’s largest cobalt producer, owns 80 percent of the mine, with Gecamines, DCR’s stateowned mining firm, holding the remaining 20 percent stake.
As if controlling the mine’s output — some 125 387 tonnes of copper and 10 465 tonnes of cobalt in the first half of 2022 alone — wasn’t enough, CMOC also controls 72 percent of the refining capacity for the mine’s output. But CMOC doesn’t refine those minerals in Africa; instead, they transport unprocessed minerals to ports in Durban, South Africa, and Dar-esSalaam, Tanzania, for overseas export.
That’s a lot of potential revenue — a lot of potential, period — we’ve let leave our shores.
To take full advantage of the critical minerals beneath our feet, we must break free from our “mining-only” mindset. The value chain doesn’t have to stop with extraction.
Yes, I understand the 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’ll see in a moment.)
◆ Read more on www.businessweekly.
co.zw