Can the net-zero transition offer a new dawn for Africa’s industrialisation?

Mineral-rich countries in Africa are looking towards bilateral and regional strategic partnerships as a way to benefit from the net-zero transition. But how can they use the quest for critical minerals for the region’s sustainable development?

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Insight by 
Rose Mosi
Senior researcher in IIED’s law, economies and justice programme
16 May 2024
Landscape with a mine and blue sky.

Manganese mine in Mkushi, Central Zambia (Photo: Rose Mosi, IIED)

The global shift towards clean energy technologies to tackle climate change has resulted in high demand for critical minerals such as cobalt, lithium, copper and nickel. 

The transport sector alone accounts for around 30% of global greenhouse gas emissions, highlighting its significance in the pursuit of net-zero objectives. As a result, the United States, European Union (PDF) and China are leading the global market for electric vehicles (EVs) with subsidies to encourage adoption. 

Lithium batteries in particular are critical in transitioning to EVs. For resource-rich countries in the global South, strategic partnerships may therefore be the key to exploit the increasing demand for critical minerals for industrialisation. 

Critical minerals: A new opportunity for Africa?

While critical minerals pose fresh challenges for global energy security (PDF), they may offer opportunities for some African nations. According to the International Energy Agency’s sustainable development scenario, by 2040, demand for copper by clean energy technologies will rise by 40%; nickel and cobalt by 60%-70%; and lithium by almost 90%. 

As the primary source of critical minerals, Africa is strategically positioned in the net-zero energy transition. To maximise this strong position, Africa needs to ensure there is a carefully designed framework for critical mineral exploitation that not only benefits its economy, but contributes to its sustainable development. In past boom cycles, African countries have been plundered for their rich resources.

Since then, African leaders have hoped mineral extraction would spearhead development but this has eluded most countries, particularly at local level. Development can only be meaningful if it addresses the fundamental needs of society, including shelter, sanitation, clean water, education, health, and infrastructure that supports livelihoods.

For this kind of development to be realised through critical minerals, African governments need to think differently about mineral exploitation. They need to form strategic partnerships in developing mineral value chains within the continent.

Accelerating local value chains through partnerships

The demand for critical minerals has come at a time when the African Union has been pushing for meaningful partnerships and value addition to raw minerals through continent-wide policies and agreements such as the Africa Mining Vision (PDF) and the African Continental Free Trade Area (PDF). The regional push for value addition has led to several African countries incorporating policies that foster local processing and manufacturing (PDF)

There is a notable policy shift in the region to promote bilateral and regional partnership. Such agreements are a common feature in critical mineral developments allowing countries to jointly leverage on their substantial mineral reserves. 

An example of this is the cooperation agreement between Zambia and the Democratic Republic of Congo (DRC) in 2022 to establish a joint production facility for EV batteries and battery precursors. 

In this case, Zambia and the DRC are together leveraging their abundance of copper and cobalt for the energy transition. Zambia and the DRC are currently ranked the eighth and fourth largest global producers of copper, respectively, and both mine cobalt used in the production of lithium-ion batteries. DRC is currently the world's largest producer of cobalt, producing about 70% of the world’s cobalt.

In practice, the DRC-Zambia partnership requires significant infrastructural, technical and financial resources and capacities to make it happen. The two countries have established the DRC-Zambia Battery Council to support implementation of the agreement. 

This will call for different levels of cooperation to set up and run the plant – from establishing national level laws and policies, allocating land, setting up special economic zones, establishing access to a stable power source, constructing the plant, purchasing equipment, to training personnel to management arrangements, offtake agreements, sharing of profits among other issues. 

The partnership between these neighbouring countries is strategic and departs from the norm in Africa where more often countries extract and export their raw minerals to boost their own economies.

The DRC-Zambia partnership is different but complementary to Africa Continental Free Trade Agreement (AfCFTA). It allows both countries to add value to their minerals and jointly trade with other countries whereas the AfCFTA is intended to facilitate regional trade by reducing red tape to promote free movement of people and goods across Africa. Thus, the DRC-Zambia partnership can be useful in learning the practicalities of implementing wider regional collaboration under the AfCFTA. 

From policy to practice

To support the implementation of the Zambia-DRC cooperation agreement, Zambia and DRC signed a framework agreement with the Africa Export-Import Bank (Afreximbank) and the UN Economic Commission for Africa (ECA) as a step towards the establishment of special economic zones to produce EVs and batteries. 

In addition, Zambia and the DRC signed a memorandum of understanding with the United States to support the development of an EV battery value chain. Although this is not legally binding, it lays the groundwork for future collaboration in the EV sector.

But to get an EV battery manufacturing plant off the ground, Zambia and DRC will have to overcome major systemic challenges at the country and continental level first. Both countries will require funding, building of technical skill and capacity, and strengthening of their governance and economic systems. 

At the manufacturing level, they will have to source other minerals that are needed to produce batteries, in addition to cobalt; secure reliable and affordable energy for the manufacturing process; and ensure that they do not commit too large a share of their minerals for export. 

At a continental level, such agreements will need to be coordinated to avoid duplicating efforts and will require a baseline on key issues such as environmental and social safeguards.

What next?

The resilience of the global economy, which currently depends on clean energy technologies, requires a sustainable and future-proof supply of critical minerals. 

If Africa hopes to benefit from the net-zero transition, its leaders will need carefully designed regional cooperation agreements that are adequately funded and implemented, with a coordinated regional approach to ensure success. 

Agreements like the one between Zambia and the DRC could act as a pilot for implementing the AfCFTA and all it could offer – market integration, trade facilitation and the achievement of the Sustainable Development Goals.

About the author

Rose Mosi ([email protected]) is a senior researcher in IIED’s law, economies and justice programme

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