By Adrian Joseph
Africa possesses vital reserves of the minerals which are important for batteries, photo voltaic panels and different inexperienced tech that can underpin the power transition from fossil fuels to renewables. Africa’s mining trade, nevertheless, stays largely structured round a “pit-to-port” mannequin that channels mineral ores elsewhere for processing. The inaugural Crucial Minerals Africa convention in Cape City this month explored how this image could possibly be modified.
The safety of vital mineral provide chains is strategic for a lot of nations as a result of anticipated progress in demand pushed by the uptake of fresh power applied sciences around the globe.
In its 2023 International Dangers Report, the World Financial Discussion board highlighted the dangers of ineffective local weather motion induced by a scarcity of worldwide cooperation to facilitate versatile mineral provide chains. This might probably result in a useful resource disaster, provided that the calls for of the power transition require the supply of sure vital minerals to be scaled up considerably.
Dominant China
One other necessary issue that has pushed geopolitical issues over vital minerals is the dominant place of China within the manufacturing and processing of many of those minerals.
Many nations and areas, notably the US and the European Union, have belatedly come to understand their strategic vulnerability to future disruptions in provide chains dominated by China. In September this 12 months, the EU Parliament endorsed the Crucial Uncooked Supplies Act, whereas within the US, the American Battery Minerals Initiative and the Inflation Discount Act additionally search to assist enhanced entry to vital minerals and incentivise native manufacturing of inexperienced applied sciences.
Australia, Canada, India and the UK not too long ago printed vital mineral methods. The Minerals Safety Partnership is a collaboration of 13 nations and the European Union to catalyse private and non-private funding in accountable vital minerals provide chains globally.
Audio system from the US, UK and Europe at Crucial Minerals Africa positioned nice emphasis on partnerships and win-win options for Africa, noting that Africa’s requires extra processing and worth addition on the continent have been being heard loud and clear.
However, there are some tough realities behind the rhetoric — the Crucial Uncooked Supplies Act foresees 10% of Europe’s vital minerals demand being provided by native manufacturing and an extra 15-20% to be sourced by recycling, which suggests the remaining 70-75% should be imported from elsewhere.
Focused insurance policies wanted
If Africa is to efficiently exploit its vital mineral endowments, it should navigate a posh geopolitical surroundings, handle necessary coverage trade-offs and foster regional cooperation to strengthen the developmental impacts of the mining sector on the continent.
Africa’s mineral-rich economies may gain advantage tremendously from the rise in demand for vital minerals akin to cobalt, lithium, graphite and manganese, however realising this ambition would require focused insurance policies that concentrate on creating home processing capability and supporting socially and environmentally accountable mining.
Minerals processing sometimes requires giant quantities of electrical energy, which is unavailable or unreliable in lots of African nations. As well as, it’s usually not economically possible to localise all segments of a mineral provide chain in a single nation resulting from a scarcity of economies of scale. Whereas these challenges are vital and have hampered earlier efforts to advertise mineral worth addition on the continent, they don’t seem to be insurmountable.
One solution to overcome these challenges could be to cluster manufacturing by particular financial zones and industrial parks such because the one deliberate within the landmark settlement signed between Democratic Republic of the Congo and Zambia earlier this 12 months. Selling the event of regional worth chains is crucial to foster regional collaboration and assist financial diversification.
It’s inside this context that the African Inexperienced Minerals Technique (at present below growth) can play a pivotal function in leveraging Africa’s mineral sources to the advantage of its residents.
Social and environmental challenges
Whereas vital mineral wealth has the potential to advertise resource-led industrialisation in lots of African nations, there’s additionally the chance {that a} substantial enhance in demand for these minerals will unleash a wave of recent social and environmental challenges. Most of the minerals essential to the power transition are concentrated in nations which have struggled traditionally with fragility, weak governance and rent-seeking behaviour within the mining trade.
Moreover, a latest report by S&P International on the nexus of vital minerals and biodiversity reveals that a good portion of mining for vital minerals is happening inside key biodiversity areas.
A failure to correctly handle these rising environmental and social disruptions might foster a justified perspective of hostility in direction of the mining of those minerals, thereby undermining the broader power transition.
These environmental and social challenges have to be set in opposition to the truth that the transition to a net-zero financial system will likely be minerals-intensive and subsequently place a considerable amount of stress on the mining trade to safe the numerous amount of minerals wanted to facilitate the power transition.
How policymakers reply to those social and environmental challenges will in the end decide whether or not the availability of vital minerals serves as a catalyst or a brake within the power transition. Addressing it will require deepening and updating accountable mineral stewardship frameworks that handle the dangers of an elevated demand for vital minerals mining in a clear and accountable method.
Tough selections
There’s a additional problem — China’s dominance of green-tech worth chains has come about as a result of it has been capable of drive down prices. Diversifying these worth chains away from the least-cost producer, whether or not by coverage carrots (akin to subsidies) or sticks (a number of African nations have already positioned restrictions on the export of unprocessed vital minerals), may have impacts on value, which in flip could dampen the competitiveness and uptake of renewable power initiatives and electrical autos. This isn’t excellent news for the worldwide effort to decarbonise and handle local weather change.
Tough selections lie forward, however a transparent message from Crucial Minerals Africa was that the area doesn’t have to simply accept its place as a supply of unprocessed minerals for different main markets.
Partnerships are being fashioned, investments made and insurance policies adjusted to reposition the continent inside world provide chains — it’s important, nevertheless, that governance frameworks are strengthened to make sure that these efforts don’t come at the price of the continent’s ecosystems and its folks.
African governments might want to work in partnership with the non-public sector, civil society and academia to develop a brand new social contract that not solely fosters mineral-led industrialisation on the continent, however does so in a manner that demonstrates Africa’s means to play a number one function within the world power transition.
Because the African proverb reminds us: “If you wish to go quick, go alone. If you wish to go far, go collectively.”
Concerning the creator: Adrian Joseph holds a Bachelor of Arts Honours Diploma in Philosophy, Politics, and Economics from the College of Cape City. Throughout his time at UCT he achieved a runner-up place within the 2020 Nedbank Funds Speech Competitors within the undergraduate class for his essay on land reform in South Africa. He has additionally written a number of articles for revered publications on points starting from useful resource governance to democratic transitions. He’s at present pursuing his grasp’s diploma in Worldwide Relations at UCT. His analysis pursuits embrace worldwide political financial system, useful resource governance on the African continent and sustainable growth. Adrian is at present working below the Local weather Change and Useful resource Governance Programme at SAIIA.
Supply: This text was printed by SAIIA