32 C
Belgrade
Supported byspot_img
spot_img

Unlocking Sub-Saharan Africa’s critical mineral wealth for the clean energy future

Member of Europium Groupspot_img
Supported byspot_img

As the world transitions to cleaner energy solutions, the demand for critical minerals such as cobalt, nickel and lithium is projected to surge dramatically. According to the International Energy Agency, by 2050, the demand for nickel will double, cobalt will triple, and lithium will increase tenfold. Sub-Saharan Africa, home to roughly 30 percent of the world’s proven critical mineral reserves, stands at a pivotal juncture where this transition could significantly transform the region’s economic landscape, as highlighted in the latest Regional Economic Outlook.

A Hub of critical mineral resources

Sub-Saharan Africa is already a central player in the global production of critical minerals. The Democratic Republic of Congo (DRC) alone produces over 70 percent of the world’s cobalt and holds nearly half of the proven reserves. Countries like South Africa, Gabon and Ghana are responsible for over 60 percent of global manganese production. Significant but largely untapped lithium deposits exist in Zimbabwe, the DRC, and Mali, with other critical mineral reserves spread across Guinea, Mozambique, South Africa and Zambia.

Economic prospects from rising mineral demand

The burgeoning demand for critical minerals is expected to significantly boost revenues in Sub-Saharan Africa. Over the next 25 years, global revenues from just four key minerals—copper, nickel, cobalt and lithium—are estimated to reach $16 trillion in 2023 dollars. Sub-Saharan Africa could capture over 10 percent of these revenues, potentially increasing the region’s GDP by 12 percent or more by 2050. Despite the inherent uncertainties due to volatile commodity prices and technological advancements, the region’s economic outlook is promising.

Supported by

Beyond raw material exportation: The value of processing

To maximize economic benefits, Sub-Saharan Africa needs to go beyond exporting raw minerals and focus on local processing. For example, raw bauxite, valued at $65 per ton, can fetch $2,335 per ton when processed into aluminum. However, the current infrastructure limitations often force countries like Zimbabwe to export unprocessed lithium, which is then processed overseas, primarily in China. Developing local processing industries could substantially increase value addition, create skilled jobs, and boost tax revenues, thereby supporting poverty reduction and sustainable development. Such economic diversification would reduce dependency on volatile commodity prices and stabilize national economies against exchange rate fluctuations and foreign currency reserve issues.

Fostering regional integration for broader benefits

A coordinated regional strategy is essential to create a larger, more attractive market for investments in mineral processing. By collaborating across borders, Sub-Saharan African countries can better utilize their diverse critical mineral resources. For instance, the African Continental Free Trade Area (AfCFTA) could help reduce trade barriers, develop infrastructure, and unite fragmented markets to facilitate larger-scale operations and regional value chains. Initiatives like the collaboration between the DRC and Zambia on battery production for electric vehicles demonstrate the potential of regional integration.

Improving investment and business environments

Creating a favorable investment climate involves simplifying bureaucratic processes and harmonizing mining regulations across countries to foster a predictable and stable environment. Addressing environmental concerns associated with mining and processing is crucial for unlocking green finance opportunities. Strengthening frameworks like the Africa Mining Vision, initiated by the African Union in 2009, can guide these regional efforts.

Domestic reforms for sustainable development

Countries must complement regional efforts with domestic reforms to support local mining and processing sectors. Careful application of local content requirements, which mandate the use of local materials and labor, is essential to avoid inefficiencies and market distortions. Policies like export bans on raw materials need reevaluation, as they can inadvertently reduce production.

A supportive business environment requires robust financial markets and improved access to finance, where fintech innovations can play a critical role. Responsible management of resource windfalls necessitates accountable and transparent institutions, effective tax regimes, and sound public financial management.

Conclusion

Sub-Saharan Africa has a unique opportunity to leverage its abundant critical mineral resources amidst the global shift to clean energy. By focusing on regional cooperation, enhancing local processing capabilities, and undertaking necessary domestic reforms, the region can transform its economic landscape, driving sustainable development and significantly improving the livelihoods of its population.

Supported byElevatePR Digital

Related News

Coal India expands into graphite mining with new license

Coal India Limited (CIL) is diversifying its operations beyond coal for the first time by entering the graphite mining sector. The Ministry of Mines...

Latin America’s chance to redefine mining and drive the global energy transition

Latin America's tumultuous relationship with mining dates back to the conquistadors' plundering of gold and silver for the Spanish crown. Following independence, the arrival...

U.S. faces critical mineral supply challenges: Urgent policy reforms required for energy security

The global shift towards electrified economies is redefining energy security, as the demand for essential metals like lithium, graphite, copper and rare earth minerals...

Cornish Metals finalizes $4.5 million royalty sale to focus on South Crofty tin project in UK

Cornish Metals Inc., a mineral exploration and development company focused on its 100% owned and permitted South Crofty tin project in Cornwall, UK, has...
Supported by
Supported by
Supported by
error: Content is protected !!