African Mining Must Not Miss the Green Gravy Train

“For some minerals, the increase will be exponential. By 2040, graphite demand will increase by 25 times, and lithium by 42 times,’ declared United States (US) Under Secretary of State for Economic Growth, Energy and the Environment Jose Fernandez at the Africa Mining Indaba 2023 (#AMI2023).

During his keynote address, he urged African nations not to miss this ‘green gravy train’ as it hurtles towards #NetZero. Indeed, Africa has significant reserves of most, if not all, the critical minerals needed to produce batteries for Electric Vehicles (#EV) which is so vital for the #GreenTransition. How can Africa benefit from the #EnergyTransition to elevate its people and economy?

Global demand for minerals essential (such as Lithium and Graphite) to the energy transition will increase by a factor of four to six.

International EnergyAgency Forecast

To assist African countries to extract the most benefits from this bonanza, the US, along with 11 developed countries, have launched the Mineral Security Partnership (MSP). The MSP will work to ensure the mining sector maintain high standards in Environmental, Social and Governance (#ESG) matters.

Local Beneficiation has been the buzzword in the African mining discourse over a number of years. Africa should perform Local Value Addition (#LVA) rather than just exporting raw materials. By climbing up the value chain, Africa stands to boost socio-economic progress, create jobs and redress the balance of trade.

It is worth highlighting the emerging regional cooperation between Zambia and DR Congo in this area. Eventually, the aim is to be able to produce electric batteries locally. DR Congo, Zambia and Zimbabwe possess ample reserves of cobalt, copper and lithium which go into batteries. The regional partnership will serve as a litmus test for African countries’ capability to seize the #NetZero opportunity.

Other players have also expressed support. The African Development Bank (#AfDB) has drafted a Green Minerals Strategy to help countries develop battery and EV value chain domestically. The AU, UNECA, AfrExim Bank and African Finance Corporation are all supportive of more #LocalBeneficiation.

One of the key imperatives is to diversify and derisk the global supply chain (#GSC) of #CriticalMinerals and avoid it being in the hands of a single country. Already, 80% of the world’s cobalt is processed in China with most of the ore originating from DRC which possesses 70% of the world’s reserves. Undersecretary Fernandez hammered the point that it should be clear that it is in nobody’s interest to have so much dominance in any critical mineral in the hands of single country.