- The President of the Africa Finance Corporation has said that Africa can make up to $240 billion from critical mineral market expansion.
- Africa is known for exports of critical minerals that are needed for the global energy transition
- If the continent can resolve its infrastructural challenges, it can gain from critical minerals, not just by exporting but also making products from these minerals.
Samaila Zubairu, the President of the Africa Finance Corporation (AFC) has said that Africa can gain up to $240 billion from critical mineral market expansion.
The AFC President who spoke to Politico recently, said that the continent needs to invest in infrastructural capacity to enable industrialization on a large scale. This will help the continent to add value to its critical minerals.
- “If we continue to export raw cobalt, raw lithium, nickel we might just get about $12 billion. But if we can move to battery and cathode precursors? That’s $240 billion.
- “We urgently need infrastructure. There are several estimates that say $130 billion to $170 billion, depending on if you consider maintenance.
- “The real spending that we need is for infrastructure that enables industrialization to take place because the big challenge we have on the continent is that we are still operating the same business or economic model for the last two centuries that led us nowhere.
- “We need to move away from exporting raw materials as primary produce to doing value addition. If we look at critical minerals, you must do all that is required to do that mining sustainably.
- “You need a road from that mine to either a rail line or a primary road. From that road to a port. At that port, there should be an industrial park that will do the processing and transformation, and then it can be exported.”
Why this is important
To put the importance of critical mineral production in Africa in a proper context, it is important to see the requirement for some components of clean energy. A solar PV installation requires 6 times more critical mineral inputs (7,000 kg per megawatt of installed power capacity) than a natural gas‐fired power plant.
Also, an onshore wind installation requires 9 times more critical mineral inputs (10,000 kg/MW), while an offshore wind installation requires 13 times more critical mineral inputs (15 000 kg/MW). It is important to note that the IEA has said that the production of critical minerals is highly concentrated in China and there should be an expansion and diversification of the production of these minerals.
In its 2023 Energy Technology Perspectives report, the IEA stated:
- “China is the leading global supplier of clean energy technologies today and a net exporter for many of them. China holds at least 60% of the world’s manufacturing capacity for most mass-manufactured technologies (for example, solar PV, wind systems, and batteries), and 40% of electrolyser manufacturing.”
What you should know
In April 2023, Energy Ministers of G7 countries met in Japan. During the meeting, they highlighted the importance of critical minerals in the global energy transition. They noted that there is a need to prevent economic and security risks caused by vulnerable supply chains, monopolization, and lack of diversification of existing suppliers of critical minerals.
- During the meeting, the G7 Energy Ministers promised to responsibly boost new mines and supply chains for critical minerals to meet the rising demand. They pledged $13 billion in fiscal support that can be used for domestic and foreign critical mineral projects.