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Africa has significant reserves of minerals essential for batteries, solar panels, and green tech, but its mining industry is largely structured around a “pit-to-port” model. The Critical Minerals Africa conference in Cape Town explored how to change this, highlighting the strategic importance of critical mineral supply chains for countries due to expected growth in demand driven by clean energy technologies.
The World Economic Forum’s 2023 Global Risks Report highlighted the risks of ineffective climate action due to a lack of global cooperation to facilitate flexible mineral supply chains, potentially leading to a resource crisis. Geopolitical concerns over critical minerals are driven by China’s dominant position in the production and processing of many of these minerals.
Countries like the US and the European Union have recognized their strategic vulnerability to future disruptions in supply chains dominated by China. The Minerals Security Partnership, a collaboration of 13 countries and the European Union, aims to catalyze public and private investment in responsible critical minerals supply chains globally.
The Critical Raw Materials Act aims to supply 10% of Europe’s critical minerals demand through local production and 15-20% through recycling, with the remaining 70-75% requiring imports. Africa must navigate a complex geopolitical environment, manage policy trade-offs, and foster regional cooperation to exploit its mineral endowments. Africa’s mineral-rich economies could benefit from increased demand for critical minerals like cobalt, lithium, graphite, and manganese, but this would require targeted policies focusing on domestic processing capacity and socially and environmentally responsible mining.
Minerals processing in many African countries often requires significant amounts of electricity, which is often unavailable or unreliable. Localizing all segments of a mineral supply chain in a single country is often not economically feasible due to a lack of economies of scale. Clustering production through special economic zones and industrial parks can help overcome these challenges. Promoting the development of regional value chains is essential for regional collaboration and economic diversification.
The African Green Minerals Strategy can play a pivotal role in leveraging Africa’s mineral resources for its citizens’ benefit. However, a substantial increase in demand for these minerals may also unleash new social and environmental challenges. Many minerals crucial to the energy transition are concentrated in countries with historically struggled with fragility, weak governance, and rent-seeking behavior in the mining industry.
The mining industry faces significant challenges in securing the necessary minerals for the transition to a net-zero economy, which is minerals-intensive. These challenges must be addressed to ensure the supply of critical minerals serves as a catalyst or a brake in the energy transition. Policymakers must deepen and update responsible mineral stewardship frameworks to manage the risks of increased demand for critical minerals mining transparently and accountablely.
China’s dominance in green-tech value chains has led to a shift away from the least-cost producer, potentially impacting the competitiveness and uptake of renewable energy projects and electric vehicles. This is not good news for the global effort to decarbonize and address climate change.
Critical Minerals Africa emphasizes that the region does not have to accept its position as a source of unprocessed minerals for other major markets. Partnerships, investments, and policies are being formed to reposition the continent within global supply chains, but governance frameworks must be strengthened to ensure these efforts do not harm the continent’s ecosystems and people. African governments must work with the private sector, civil society, and academia to develop a new social contract that fosters mineral-led industrialization and demonstrates Africa’s ability to play a leading role in the global energy transition.
