In making a case for critical minerals in an interview with the BBC, Dr Robert Muggah, principal of SecDev, a geopolitical risk consultancy based in Canada said, “They are the foundation of the 21st Century economy. They are key to renewable energy, military applications and industrial infrastructure and play “a growing strategic role in geopolitics and geoeconomics.”
Now Dr Theophilus Acheampong, an economist and political risk analyst in the extractives industry, public financial management, and academia, wants to see Africa taking control of its minerals, especially today when the energy transition movement is strong worldwide – with countries looking to replace fossil fuels with a combination of renewable energy sources, particularly the so called green minerals or critical raw materials.
The Ghanaian was speaking virtually from Accra at a recent workshop held in Kampala, Uganda, that was organized by the Natural Resource Governance Institute (NRGI) in collaboration with the Advocates Coalition on Development and Environment (ACODE), the Civil Society Coalition on Oil and Gas (CSCO) and the Uganda Chamber of Energy and Minerals (UCEM) with support from the UK international Development.
Participants from the private sector, civil society and government institutions shared practical steps that Uganda needed to take to maximize benefits from its mineral wealth, guided by the theme: “Unlocking Mineral Value Addition to Support Uganda’s 10-Fold Growth Strategy”.
A panel at the forum
The government of Uganda set a bold target to increase the size of the economy from about $50 billion in the 2023/24 Financial Year (FY) to $500 billion by 2040. This tenfold growth strategy is anchored on four primary sectors: Agro-industrialization, Tourism development, Mineral development (including oil), and Science, collectively referred to as the ATMS.
Acheampong, focused his discussion on three areas, that is: the mining geopolitics around the energy transition debate, African industrialisation and opportunities for value addition, mineral refining and processing plus regional integration and regional value chains.
He noted that some minerals Africa considered critical may vary from the rest of the world because of the continent’s unique needs. The ‘African Green Minerals Strategy’, a paper recently released by the African Union (AU) and the African Development Bank (AfDB), was a good starting point to appreciate these minerals, he said.
The document listed aluminium, chromium, cobalt, copper, graphite, iron ore, lithium, manganese, nickel, phosphates, platinum, rare earth elements (REEs), titanium, vanadium and zinc as core minerals on the continent.
“In other jurisdictions, they consider 50-plus different minerals as critical yet from an African context, it is really about 10 or so; which are needed in various technologies,” Acheampong, who also lectures at the University of Aberdeen, said.
And while the mining is happening across the world, including in Africa, the green minerals’ value chain today – mineral processing, making cell components, batteries and electric vehicles – is largely concentrated in China.
In reaction to this China dominance and the supply chain challenges that have resulted, several countries are coming up with a number of policies and strategies to claw back some control over the much sought after critical minerals, noted Acheampong.
These include USA’s Inflation Reduction Act, the European Union’s Critical Raw Materials Act (CRMA) and the Green Deal Industrial Plan, plus several similar ones from India, Australia, Indonesia, New Zealand, South Korea and Canada.
“They are all coming up with different strategies in response to these supply chain challenges. I am glad that Africa has some strategy in response, as well,” he said.
The CRMA for one aims “to ensure a secure and sustainable supply of critical raw materials for the EU’s green and digital transition; focusing on strengthening the EU’s domestic supply chains, diversifying imports, and improving resilience to supply disruptions.
On the other hand, the US has recently been keen on closing a deal with Ukraine, which is estimated to have about 5% of the world’s critical raw materials, including graphite, titanium, lithium deposits, beryllium, uranium, copper, lead, zinc, silver, nickel, cobalt, manganese and rare earth metals. Ukraine, which has been at war against the invading Russia since February 2022, hopes it can get a security guarantee from the US out of this minerals’ deal.
In March this year, the EU and Germany announced a €6.25 million plan to support Uganda’s mining industry, under a project called Sustainable Development of the Mining Sector in Uganda (SDMU); that will run until the end of September 2027. Industry observers have linked the project to the CRMA.
As such, Acheampong believes that Africa is becoming a hotbed of “ongoing geopolitical contestations on critical raw materials diplomacy” with traditional partners like the USA, Europe and China, as well as new partners from the Gulf States (United Arab Emirates, Saudi Arabia and Qatar), Turkey and India, all seeking access to the prized resources.
The Lobito Atlantic Railway that on completion will link Zambia, the Democratic Republic of Congo (DRC) and other southern Africa states to the Atlantic coast via Angola, is another intervention that will boost the geopolitical scramble. This is in addition to the old Tazara Railway that connects Zambia to the pot of Dar es Salaam in Tanzania.
“My concern, and I think the concern of many of us, is the continued exporting of these minerals in raw form from Africa. What is desirable is value addition; something several African governments are considering nowadays. But it is easier said than done,” Acheampong.
Dr Theophilus Acheampong
Collaborative Efforts
While the dynamics driving Africa’s energy transition are both external (global net-zero growth ambitions and technological developments) and internal, including increasing energy demands and industrialization ambitions, the continent remains constrained financially to adequately invest in the transition.
“For many of our countries, there is just not enough money. The budgets are strained, and governments are not in a position to be financing their own transition efforts going forward. And, therefore, it becomes quite important to leverage multiple sources of financing to drive this,” said Acheampong.
As such he wants to see more collaborative efforts like cross-border joint infrastructure and investment for processing facilities and the like. He also wants to see sovereign wealth funds and pension funds brought into minerals value addition.
“We need to take stakes into these projects instead of only waiting for foreigners to come and do it for us,” he said.
Importantly, Acheampong warns, raw mineral export bans like has happened in Uganda and in another 12 or so African countries will not automatically result into local value addition, but rather it will come down to having particular parameters in place that for a country to turn its resources into semi-finished or finished products.
These key competitiveness factors for countries aiming to process minerals into value-added products like lithium to EV batteries include: resource availability and proximity, skilled workforce plus research and development (R&D) capabilities, industrial infrastructure and ecosystems, deliberate government incentives and policy support, a stable investment climate and finally strong ESG frameworks for securing access to sustainable finance and premium markets.
Basing on these parameters, Acheampong noted that in as far as value-added processing of copper was concerned, South Africa, DRC and Zambia were the African states that stood out from a competitive standpoint.
Zimbabwe, Ghana, and Namibia were strong on lithium; while Mozambique and Tanzania were promising in insofar as graphite was concerned. DRC, Zambia, and Morocco meanwhile, led the way when it came to cobalt.
“Morocco doesn’t have a lot of cobalt, but they have good infrastructure including energy plus the related supply chain services that can make battery components,” he said.
While his study had not captured Uganda, he advised that as part of the country’s strategic drive towards beneficiation, it was important that it is assessed against the six parameters and the sub-factors that he had analyzed.
“Because Uganda is also competing for investments against other regional countries, that in some cases may have more resources or a better regulatory regime, it is important to benchmark and assess where the country sits among those six clusters while also quantifying the different mineral resources at your disposal,” Acheampong advised.
While Africa barely features in global clean-tech supply chains, whether it is in solar PV or electric vehicles, Acheampong believes the continent can play a significant role within the midstream segment of the market.
“Not every country with a mineral resource can engage in downstream processing and make EVs and whatnot. Some countries are better placed to leverage the opportunities within the processing and midstream segment of the market than further downstream in the market. Several studies have noted that Africa can actually produce lithium products at about 40% cheaper than the rest of the world,” he said.
All things considered, Acheampong does not want to see today’s opportunity “to convert mineral wealth into sustainable economic growth, driving industrialization and job creation”, lost by Africa as has happened in the past with similar prospects.
