Peter Fabricius
The continent should seize the opportunity to develop green minerals for its own benefit.
Africa has a unique opportunity to promote its development through the massive global demand for the amazing mineral deposits needed to facilitate the world’s transition to green energy.
But will Africa seize the opportunity, or will it miss it by underutilizing rare minerals or by making them available to others with little benefit to African peoples? ?This was a key theme at African Mining Indaba 2023 in Cape Town this week.
Africa has a significant share, if not all, of the essential minerals and metals needed to manufacture electric vehicle batteries and other technologies critical to a green energy future. Global demand far exceeds supply, creating a huge potential seller’s market. The International Energy Agency predicts he will see a four- to six-fold increase in demand for most minerals essential to the transition to clean energy.
“For some minerals, the increase will be exponential. By 2040, demand for graphite will increase 25-fold and that for lithium will increase 42-fold,” said the head of economic growth, energy and environment. Jose Fernandez, the US Undersecretary of Defense, told his indaba.
Global demand for minerals critical to the energy transition will grow four- to six-fold.
He warned African mining nations not to miss this potential gold mine. To get around this, the US last year created the Mineral Security Partnership (MSP) with 11 other developed countries. MSP aims to ensure that miners maintain high standards of environmental and social protection and governance, and invest across his supply chain to ensure that African countries reap the greatest benefits, he said. said.
Of course, MSP provides partners with access to critical minerals. Fernandez has admitted that the partnership is not “altruistic”. Therefore, exploitation or value creation was key to his MSP and central to indaba’s discussion.
Benefit has been a buzzword in African mining discourse. Her intriguing proposal is that African countries should first develop their own minerals, rather than exporting goods and earning relatively little income as they do today. They need to process agricultural products and sell them at much higher prices around the world, thereby balancing Africa’s imbalanced trade, creating jobs and driving growth.
But it remained mostly a dream. Now, the surge in global demand for ‘green’ minerals to make the world net-zero by 2050 has given that dream new life.
A current landmark in Africa’s mining industry is a joint venture between the Democratic Republic of the Congo (DRC) and Zambia to manufacture electric vehicle batteries in the mineral-rich DRC’s Katanga province. Both countries have large reserves of copper, cobalt and lithium, his three key components of these batteries.
Projects in the Democratic Republic of the Congo and Zambia are litmus tests for African countries’ ability to capitalize on net-zero opportunities
The United States supports this project. It is not yet clear what that means, but aside from US statements that it will help level the playing field for the private sector in projects. It will be a litmus test of the ability of African mining nations to take advantage of the opportunity. At first glance, the project seems very ambitious and skeptical about its proper use. The DRC and Zambia have extensive underground deposits and mining experience, but lack the expertise to transform raw materials into advanced products such as electric vehicle batteries.
African organizations are also supporting the joint venture and hope to expand to the African continent. As noted by indaba, the African Development Bank has developed a Green Minerals Strategy to help countries optimize and develop battery and electric vehicle value chains in Africa. Its partners are the African Union (AU) Commission, the African Legal Support Facility, the United Nations (UN) Economic Commission for Africa, the United Nations Development Programme, the African Finance Corporation and the African Export-Import Bank. When asked by the panel if the project was “viable,” industry leaders from Zambia and the Democratic Republic of the Congo argued it could. They admitted their countries lacked the skills, infrastructure and capital. However, he said they are addressing these issues, including through cooperation among universities to provide education.
Much remains to be decided about the project, including the key question of who will manufacture the battery. Chari Mwefieni, chief commercial officer of Zambia’s National Commercial Bank, told ISS Today that a feasibility study is underway to find answers. He thought a public-private partnership would likely create the battery, but the private sector would have to maintain ultimate control. The development of green minerals in Africa offers an opportunity to defuse the supply chains of these minerals.
Atlantic Council’s Peter Pham told another panel that high demand for critical minerals presents unique economic and geopolitical opportunities for Africa to seize. Pham said the transition to green energy would not be possible without African minerals, including copper. He found that a unit of wind energy required 5 times as much copper as he did, and a unit of solar energy required 25 times as much copper as he did.
Pham has implicitly expressed US interest in supporting battery projects (and perhaps he is an MSP) in the Democratic Republic of the Congo and Zambia. He said that for the United States, and perhaps adding other Western countries, the development of green minerals in Africa offers a welcome opportunity to dismantle the supply chain for these minerals. He pointed out that Amos Hochstein, an energy adviser to US President Joe Biden, told Mining Indaba that controlling the supply chain of critical minerals poses high risks for the country. , likely referring to the fact that China currently processes about 80% of the world’s cobalt. Most of it comes from the Democratic Republic of the Congo, which accounts for about 70% of the world’s reserves.
It therefore makes sense for the United States to support efforts to upgrade cobalt in the Democratic Republic of the Congo. This maintains access to strategically important minerals. The same applies to other important minerals. Should Africa care anyway? probably. Although the United States is conscious of strategic interests, it has mutual interests and does not insist on granting monopoly rights to U.S. companies. Successful processing gives African companies and governments a larger share of the mineral’s value.