1.🚁 Heli view: China’s changing role in Africa’s green economy

Across most of the continent, minerals are exported straight after extraction without local value-add. 

• But lithium mining in Zimbabwe is increasingly bucking that process.

First step: Chinese companies have started turning Zimbabwean lithium into concentrate on site before export, creating local jobs and expertise. 

Why it matters: This marks a change for China’s investment in Africa as well as a significant step towards green African industrialisation. 

• Until now, much of the economic value had accrued in China. 

• But Beijing’s new external strategy targets batteries, vehicles and solar panels rather than furniture, clothing and home appliances.

Join the queue: Multiple investments are under way, accelerating the trend.

• Zhejiang Huayou has opened a $300-million lithium concentrator with an annual capacity of 450,000 metric tons at the Arcadia mine acquired for $422 million.

• Eagle Canyon and Pacific Goal plan a $13 billion ”mine-to-energy industrial park” to produce lithium-ion batteries in Zimbabwe.

• Sinomine bought Bikita mine to produce 300,000 metric tons of spodumene concentrate.

• Chengxin Lithium Group commissioned a 300,000 metric ton per year lithium concentrator at Sabi Star mine in eastern Zimbabwe.

• In DRC, Chinese firms own or have stakes in 15 of the 19 cobalt producing mines. And they’re not done in Zimbabwe.

The driver: Hard economic calculations are behind these investments. 

• Global demand for minerals is skyrocketing due to growing battery use in vehicles.

• Africa has a lot of the relevant minerals: Zimbabwe is the largest lithium miner, and DRC is the largest cobalt producer.

• China is a leader in battery technology, controlling much of the supply chain.

The crux: Many African countries have banned unprocessed mineral exports – or are talking about it – to boost industrialisation. 

• But Zimbabwe is struggling with international sanctions due to human rights violations… which China chooses to sidestep. 

• China also employs looser loan and financing regimes as well as lower (or no) ESG standards. 

Strategic plans: China started two decades ago investing and buying up mining and manufacturing companies related to electric vehicles, including Western ones in Africa. Today it is dominant.

• The 1998 purchase of an 85% stake in Zambia’s Chambishi copper mine for $20 million was one of China’s earliest overseas mining investments.

• However, Chinese overseas lenders and investors are becoming more careful due to bad debts, domestic needs and international pressure.  

Trojan worries: Critics have warned against becoming overly reliant on China. 

• Most Chinese investors are private companies acting on commercial motives. 

• However, all sizeable Chinese firms have Communist Party cells.

The rest: China is not alone in taking an interest in African minerals and green industrialisation. 

• The United States signed deals with Congo and Zambia in December, including to develop a local EV value chain. 

• An American company agreed to develop a lithium-ion battery supply chain in Ghana. 

Bottom line: Africa is well positioned to benefit. But countless obstacles remain. 

• Moving from basic processing to full production requires better regulation and infrastructure.

• Export bans fail to prevent the smuggling of raw materials.

2. Hopes for hydrogen could not be higher

The Saharan country of Mauritania has not been on many people’s list of future industrial giants. 

Vital stats: Only about 30,000 Mauritanians work in industry, while 90,000 remain enslaved to this day.

• Number of universities: Four

• Number of coups in the past 50 years: Six

And yet: Mauritania is presenting itself to investors as the vanguard of African industrialisation thanks to green hydrogen.

• Two of the top 10 biggest hydrogen projects in the world are in Mauritania.

• With plans for 75 Gigawatts, it would contribute almost 60% of Africa's green hydrogen and nearly 30% of its solar initiatives.

• Power generation capacity today is a puny 380 Megawatts, of which 117 Megawatts are renewable.