New minerals framework favours African production

Minerals dug from African soil are to play a major role in the global green transition - and in the process could transform the continent's economy.

• Many materials at the heart of clean technologies such as wind turbines, electric vehicles and solar panels are found in Africa.

• But for the continent to win a transformative global market share, supply chains would have to undergo substantial change.

The news: An intergovernmental panel has now set the foundations for such change, giving Africa a boost. The International Energy Agency (IEA), mandated by governments around the world, has drawn up new guidelines for minerals production.

• During its first-ever critical minerals summit, the IEA issued recommendations for the diversification of minerals supply.

• This is likely to benefit African countries severely underrepresented in world markets.

What they say: The IEA, a Paris-based intergovernmental organisation established in 1974, unequivocally threw its weight beyond supply diversification, saying:

• “The level of over-concentration in critical minerals markets today is unlike that for any other major commodity we have come to rely on."

• "History has shown us that failing to properly diversify supplies and trade routes of essential resources comes with profound risks.”

• This is undoubtedly a western perspective. Many Africans have associated resources with exploitation. Yet it could nonetheless benefit the continent in future.

The opportunity: Beyond increasing production, Africa has the chance to boost its share of minerals processing to generate more jobs.

• Western governments signalled their support for increased African processing to counter China.

• In 2022, Chinese companies accounted for 68% of global cobalt refining, and 72% of global lithium refining.

Big leap: Large-scale minerals processing in Africa would be lucrative.

• According to projections for 2025, the battery raw minerals market is only worth $11 billion while battery precursors earn $271 billion and batteries $1.18 trillion.

• A battery precursor is a material at the final step before becoming a cathode.

• A study in 2021 suggested that a battery precursor plant in DRC would have 30% lower emissions, and cost 3x less than if in China and the US.

What’s needed: African minerals processing requires major investments. The first few taking shape are far from sufficient:

• Western governments are supporting a transport corridor for Zambia, Angola and DRC

• To boost skilled labour, DRC launched a centre for advanced battery research.

First results: Progress towards African minerals processing has so far been slow.

• Ghana started planning its first lithium processing facility.

• Afreximbank financed studies in DRC and Zambia for battery precursor plants.

• Marit Kitaw, interim director of the African Minerals Development Center, said, “We now need to attract the technology owners - not only offtakers - and organise a transfer of knowledge.”

Next: The sector now appears to be gaining momentum.

• South Africa will host a strategic minerals gathering.

• The IEA convenes ministers in February to further diversify minerals supply.