Africa should lead in green Industrialization

A Lithium-ion Battery

AFRICA should leverage its abundant mineral and green energy wealth to lead in the fourth industrial revolution, experts say. And in this respect, the Democratic Republic of Congo should be the nerve center, they add. 

The country is rich in mineral wealth and water. It is thus, suitable for the production of cathode precursor materials for Lithium-Ion batteries, a study has established.  The government has accepted a proposal to set up a Special Economic Zone for this purpose, we can report.

Lithium-ion batteries power everything from your Mobile phone to Airplane batteries. Now that the world is shifting to clean energy to power cars, Lithium-Ion is also powering electric vehicles, EVs. The Democratic Republic of Congo produces 70 percent of the world's cobalt, the basic Mineral in Lithium-ion batteries.

Cathode precursor materials are the intermediate material between cobalt and finished cathode material. Currently, precursor materials are produced in China from the cobalt imported from D R Congo. Poland produces cathode materials and cells, and Germany the final pack assembly.

Now D R Congo plans to upgrade its role from mining to processing to increase its stake in the BEV industry. This beneficiation could increase the country’s export earnings by US$54 billion a year, says Vera Songwe, the United Nations Economic Commission for Africa's
head.  “If the DRC captures 20 percent of the market share for battery production, it will add around US$54 billion to its income and raise its GDP tremendously,” she said.

The odds are DR Congo’s favor according to a new study. The study, by BloombergNEF, shows that building a 10,000 metric-ton battery precursor plant in the DRC would cost $39 million. A similar plant in the US, China, and Poland would cost an estimated US$ 120 million, $112 million, and $65 million, respectively.  This is due to its “relatively cheap access to land and low engineering, procurement and construction, or EPC cost compared to the U.S., Poland, and China,” said Kwasi Ampofo, lead author of the report.

Nothing stops D R Congo from expanding its role in Battery Electric manufacturing. It can carry out the processes performed in Poland and Germany. In fact, the creation of a Special Economic Zone could end up onshoring all the BEV manufacturing in D R Congo in particular, and Africa in general, with DRC as the nerve center.

Proximity to the raw materials and its reliance on hydroelectric power plants would lower the environmental footprint. In fact, says the report, it will lower emissions associated with Lithium-ion battery production by 30 percent.

 The battery precursor segment is worth US$271 billion. However, the combined battery cell production and cell assembly segments of the battery minerals global value chain are worth a mouthwatering US$1.4 trillion.

DRC’S President Felix Tshisekedi hinted at the intention to go big by urging his African counterparts to prioritize joint investments aimed at increasing Africa’s share of the BEV and renewable energy value chain.

Experts at the forum echoed the President, urging Africa to exploit AfCTA, the continental Free Trade area, to onshore other processes and increase their share in the BEV market.  The DRC can receive other upstream mineral inputs needed for lithium-ion batteries – such as manganese from, say, South Africa and Madagascar, copper from Zambia, graphite from Mozambique and Tanzania, phosphate from Morocco, and lithium from Zimbabwe, to name but a few,” say experts.

The battery and electric vehicles (BEV) value chain will be worth US$ 8.8 trillion in 2025, rising US$46 trillion by 2050, says the BloombergNEF report titled “The Cost of Producing Battery Precursors in the DRC.”

The market for BEV manufacturing is wide-open, say experts. Although there are notable leading electric-vehicle and cell manufacturers today, the sheer scale of growth expected in the long-term throws open the doors for competition and dominance of the new value chain. African countries could play a major role in the lithium-ion battery supply chain by taking advantage of their abundant natural resources and onshoring more of the value chain.

Africa is not sitting on its laurels, Markus Thill, the vice president of  the African Association of Automotive Manufacturers (AAAM), announced at the forum that, “AAAM is working with AfCFTA Secretariat to produce at least 5 million vehicles in Africa for Africa by 2025.”Thill is also the President of Bosch Africa.

Capital Costs compared:
 Congo beats hands down

James Frith, head of energy storage at BNEF spelled the necessary conditions for attracting investment in battery component or cell manufacturing as; the supply of key raw materials, or local demand for batteries. Africa has raw materials, green energy sources, a growing population, and rising demand for vehicles. It should leverage this advantage to onshore BEV production, said the experts.

However, the continent must move swiftly. “We are only at the beginning of the path to achieving net-zero emissions globally. Emerging economies in Africa can gain significant long-term economic value by quickly setting up projects that support the low-carbon transition with transparent governance frameworks,” stated Ashish Sethia, global head of commodities at BNEF.