African countries hold sizable shares of known reserves for many of these critical minerals. Key sectors reliant on these critical minerals include automotive and aeronautical systems, mobile phones, computers, electronics, energy, medical technologies, and steel production, among others. Such minerals are also increasingly taking center stage in global geopolitics as China accounts for 87 percent of the global processing of strategic and rare earth minerals.
Previous eras of natural resource extraction from Africa have been highly disruptive and destabilizing, contributing to what became known as the natural resource curse, where countries with relatively more abundant natural resources tended to become more autocratic, corrupt, and conflict prone while lagging in their development. This instability, in turn, made investing in Africa less attractive to countries and companies committed to higher standards of transparency and mutually beneficial partnerships.
The latest surge in demand for Africa’s critical minerals and metals occurs against the unfortunate backdrop of a lack of African preparation to develop a solid infrastructural base to derive the benefits of the strategic minerals and rare earths ecosystem.
African countries still lag when it comes to key human competencies like chemical, mining, and industrial engineering, metallurgical engineering, environmental science, and economics. These cannot be developed overnight, but through a sustained process backed up by mutually beneficial international partnerships that add value to what each country wants to achieve.
Even where policies are in place to require prospective foreign firms to refine minerals locally, institutional bottlenecks remain a major impediment. Zimbabwe is a good example. The government gave miners (mostly Chinese) until March 2024 to submit plans on refining lithium in the country. However, due to the lack of domestic industrial capacity, these companies are simply breaking down lithium-bearing rocks (such as spodumene) to obtain liquid lithium concentrate. While this involves a multistep process, lithium concentrate is still raw lithium. As a result, Zimbabwe is still exporting a raw material and not moving up the value chain as intended. The big lesson here is that policies must match industrial and human resource capabilities and inputs.
African countries, meanwhile, often do not have a significant domestic market for the finished products they must then buy back at an exorbitantly higher cost. Let’s take a look at the electric vehicle (EV) market. China has the world’s largest market, with around 60 percent of the world’s EV sales. Next is Europe with 25 percent. The United States has around 10 percent. The African share of the world’s EV market is very small. In Kenya, a potential growth market, EVs account for about 350 of the country’s 2.2 million cars. In South Africa there are only 6,000 EVs out of 12 million cars. In total, Africa has less than a 1-percent share of the world’s EV market.
Considering this, efforts by African governments to get foreign firms to locally refine the components for EV batteries (of which lithium is only one element) and even manufacture batteries is a tough ask. In contrast, the foreign powers racing for Africa’s strategic and rare earth minerals all have policies in place to secure reliable supply chains and stockpiles as quickly as possible.
For the latest global mineral drive to be a boon for Africa, African countries need to invest heavily in research and development, take steps to address their lack of industrial capacity, and develop the skills and technologies for processing these minerals. In the interim, they need to identify and develop solid competencies in niche areas within the mining ecosystem.
A Guest Editorial