New York, 22 September 2023 (ECA) - Africa must fully exploit its abundant critical mineral resources to accelerate sustainable industrialisation and clean energy transition, the Economic Commission for Africa (ECA) Acting Executive Secretary, Antonio Pedro, has urged leaders at a business summit on the sidelines of the United National General Assembly in New York.
Speaking at a panel discussion on “Extractives, Batteries, Electric Cars: Powering Tomorrow, Today” hosted by the Global Africa Business Initiative (GABI) Mr. Pedro noted that Africa should benefit from its critical mineral resources through fair value creation to ensure that “our resources are used to promote resource driven industrialization to create jobs and enable countries to go up the value chain.”
GABI’s Unstoppable Africa is an African private sector-led platform that aims to galvanize leaders across key sectors to invest in Africa - bridging the gap between global investors and Africa's vibrant, emerging sectors. The two-day event is co-convened by the United Nations Deputy Secretary General, Amina J. Mohamed and the Chairperson of the African Union, Moussa Faki Mahamat on the sidelines of the United Nations General Assembly in New York. The event brings together Heads of State, Ministers, investors and UN leaders, joined by stars in music, sport and film for an exclusive two-day forum on Africa’s future.
The session, organized with the aim of elevating Africa’s prominence in the global economy and positioning the continent as the premier destination for business, trade, and investment, explored Africa's pivotal role in the burgeoning landscape of electric cars and sustainable energy and discussed the continent's capability for innovation and leadership in these sectors. Despite Africa being endowed with an array of minerals from copper, magnesium, nickel and cobalt, the continent has not been able to make energy transition.
Mr. Pedro said that enabling policies and incentives are important in boosting investment in the value addition of critical minerals.
Ms. Oluranti Doherty, Director of Export Development at the Afreximbank said that African countries need to take ownership and leadership in the development of their mineral resources.
Underlying Afreximbank's commitment to promoting an inclusive battery and electric vehicle value chain, Ms. Doherty said the bank is promoting industrialization on the continent and is facilitating the development of Special Economic Zones in Zambia and the DRC.
"Following the signing of the framework agreement between the DRC, Zambia, ECA and Afreximbank for financial and technical assistance, we have put together USD1 million to support the preparation of the prefeasibility study for the creation of special economic zones in these countries,” Ms. Doherty said.
A study by BloombergNEF identifies DRC as an attractive location for the manufacturing of sustainable battery precursors as it has abundant cobalt resources and hydroelectric power.
The study promoted by the ECA, Afreximbank, the African Development Bank, the Africa Finance Corporation, the Arab Bank for Economic Development in Africa (BADEA), the African Legal Support Facility (ALSF), and the UN Global Compact, noted that the battery precursors to be produced in the DRC would be cheaper, environmentally sustainable and competitive than material produced in China.
According to M. Pedro, the value addition of critical minerals and the boom in electric vehicle demand currently represent a $7 trillion market up to 2030 and $46 trillion by 2050. The DRC produces over 70% of the world’s cobalt. Together with Zambia, it also supplies 10% of global copper. Moving the DRC one step up on the electric battery value chain could increase the $11 billion in mining proceeds to $270 billion.
Speaking at the same panel, Brian Menell, Chair and CEO, TechMet Ltd noted that Africa has a massive opportunity to be at the forefront of the critical minerals supply for the energy transition and Africa’s development.
“Africa has the mineral resources for local beneficiation and with the value addition benefiting local communities, investors are keen to forge partnerships with African governments to enable competitiveness of what is produced, ensuring high standards on sustainability, governance and transparency”, he said.
The United States is advancing critical minerals partnerships in Africa and is supportive of value addition as a shift from the extractive model of the past. In December 2022, the US signed an MoU with the governments of the DRC and Zambia for the value chain development in critical minerals through processing and manufacturing.