How critical energy minerals could be Africa’s catalyst for sustainable development

Africa's economic landscape has been significantly shaped by mining, and the sector continues to represent an important employer and component of African nations’ GDP and trade balances.

While challenges persist, the continent's vast critical energy mineral reserves offer transformative opportunities, particularly in the context of the global energy transition.

Minerals such as bauxite, chromium, cobalt, copper, graphite, lithium, manganese and nickel are vital for producing batteries, fuel cells and other components used in renewable energy systems, technologies and electric vehicles.

As the world shifts towards clean energy solutions, the demand for these resources is projected to increase exponentially. For example, BHP Billiton projects that by 2050 there will have been a 70% increase in global copper demand compared to 2020.

With Africa holding meaningful shares of the worldwide reserves of copper and these other critical energy minerals, therein lies an opportunity for the continent to gear sustainable development initiatives and projects.

Despite its resource riches, Africa has lagged in terms of development – a legacy of colonialism as well as underinvestment in the post-colonial era.

Today, most African economies are classified low-to middle-income, and they face complex developmental challenges exacerbated by structural inequities, energy deficits and high unemployment.

One manifestation in the mining sector is limited value-add beneficiation – the treatment of raw material (such as iron ore) to improve physical or chemical properties, especially in preparation for smelting.

Particularly in view of the clean energy transition, this presents an opportunity. By developing local industries to process critical energy metals and minerals into higher-value products, Africa can drive industrialization and expand its own energy access.

Indeed, prioritizing beneficiation and attracting investment into the energy minerals sector can enhance the resilience of many African economies, and reduce their dependence on raw exports.

An example is the global battery manufacturing industry, which is projected to employ more than 10 million people by 2030, with significant economic growth expected in regions that invest in local battery and electric-vehicle component manufacturing.

By capturing even a small share of this market, Africa could create 500,000 to 1 million jobs, thereby reducing unemployment and the outflow of skilled labour.

A virtuous circle will come into play, because shifting from raw material exports to domestic processing could drive up electricity demand by up to 30%, in turn necessitating investments in clean energy generation and grid expansion.

This will lower energy costs and count towards African nations’ nationally determined contribution (NDC) goals, per the Paris Agreement climate accords.

Meanwhile, regional initiatives like the African Continental Free Trade Area (AfCFTA) could help develop energy-efficient processing hubs, potentially lowering electricity costs.

These kinds of transition developments and initiatives have the potential to increase Africa’s annual export revenues by over $10 billion, thereby bolstering fiscal resources and enhancing debt servicing capabilities.

The global shift towards renewables is Africa’s chance to position itself as an important strategic player in the energy transition.

Africa holds a significant share of the world's future energy mineral reserves. Platinum group metals, mined in South Africa and Zimbabwe, are crucial for green hydrogen and decarbonizing heavy transport, heating and industry.

Chromium, also extracted in South Africa and Zimbabwe, is important for concentrated solar power, geothermal, nuclear, hydropower, and wind technologies.

Cobalt and manganese are essential for lithium-ion batteries used in electric vehicles and energy storage, and for technologies such as concentrated solar power, wind, hydro, and geothermal energy generation systems.

Mining industries across Cote d’Ivoire, the Democratic Republic of Congo, Gabon, Ghana, Madagascar, South Africa and Zambia supply much of the world’s current demand for these materials.

Graphite and lithium, too, are key inputs for green technology and energy system components, and mines in countries including Namibia, Mali and Tanzania fulfill significant proportions of global demand. Guinea, meanwhile, is the world’s leading producer of bauxite, the main raw material for aluminum – vital to many production processes and secondary industries.

To harness the potential value of this incomplete snapshot of the continent’s critical energy minerals, African countries should adopt a holistic, strategic approach involving regional collaboration, infrastructure development, partnerships with global powerhouses in the energy and mining sectors, and investment in human capital.

By envisioning the regearing of its mining industries towards sustainable development and practices, and positioning – expanding – their role within regional beneficiation hubs of manufacture and value-add, African economies can fulsomely participate in the energy transition and grow at a rate commensurate with that needed to uplift incomes and living standards of people.

Africa stands at a pivotal moment. By strategically managing its vast resources of critical energy minerals, the continent can drive economic growth, create jobs and secure a prosperous future for the citizens of many countries on the continent.