Critical Minerals and Africa: Avoiding a Zero-Sum Game

The clean energy transition will require significant amounts of critical minerals which are not only vital to the manufacturing of clean energy technologies (e.g., solar panels, wind turbines, electric vehicles, battery storage, hydrogen electrolyzers and fuel cells), but they are also essential in several applications of the defence, ICT, pharmaceutical industries and they are crucial to achieve economy-wide decarbonisation objectives (i.e. the transport and industrial sectors).

The EU, the United States and China have made commitments to reach net-zero by 2050 and 2060 respectively, while the EU and a growing number of US states such as California and New York want to stop selling petrol and diesel cars by 2035. The growing importance of critical minerals for the clean energy transition was affirmed by the G7 in April 2023 in its Five-Point Plan for Critical Minerals Security. The accelerated pace of the transition is causing a spike in critical minerals demand, as the clean energy transition will require six times more mineral inputs in 2040 than today.

At present, production and processing of green transition minerals is geographically concentred, leading to growing concerns around security and resilience of critical minerals supply chains. To mitigate risks of supply chain disruptions the Global North is taking steps to incentivise onshoring and "friendshoring" of critical minerals supply chains, as well as managing demand through recycling and investing in research and development to find less mineral intensive technologies.

However, net-zero objectives in the Global North cannot be achieved without Africa’s green transition minerals. Africa holds substantial reserves of bauxite, chromium, cobalt, copper, gold, iron, lithium, manganese, platinum, and uranium to name just a few. Given the competition for access to these resources, Africa should not miss the opportunity to capitalise on its mineral endowments to drive transformative sustainable growth, economic diversification as well as local and regional development through value-added processing and manufacturing. African countries will need to determine how to optimise value from their resources to support meaningful productive transformation, integration into regional and global trade systems as well as the development of long-term prospects for industrialisation, while also contributing to building diversified, resilient, and affordable supply of critical minerals for the global clean energy transition. As mining becomes more automated and digitised, new shared value creation opportunities should be pursued, beyond direct employment.  Sustainable mining can become a catalyst for local procurement of goods and services, shared use of infrastructure as well as an anchor for renewable energy development.

At the same time, it is crucial to ensure that the global shift to clean technologies does not come at the detriment of African communities, potentially bearing the brunt of corruption, pollution, and environmental damage if sound policies and robust institutions are not in place. Additional challenges stem from the fact that substantial reserves of critical minerals are increasingly found in hotspots for biodiversity, fragility, and conflict, as well as lands traditionally belonging to indigenous peoples. This is where a sustainable development licence to operate (SDLO) can provide a framework of principles, policy options and good practices to address ESG risks, manage public finance risks caused by a sudden growth in extractive revenues, enhance the extractive sector’s contribution to achieving the SDGs and to improve the net societal benefits of mining.

In the lead up to the IEA Critical Minerals and Clean Energy Summit to be held on 28 September in Paris, the African Development Bank, the Center for Global Development and the OECD Development Centre will host a virtual discussion bringing together representatives from African governments, industry, civil society to discuss Africa’s strategic interests and priorities for critical minerals development, the implications for the continent of the expected growth in demand for critical minerals, as well as opportunities to pursue transformative sustainable growth, by leveraging regional co-operation through the African Continental Free Trade Area (AfCFTA), the  Africa Mining Vision, and the African Green Minerals Strategy, currently under development.

Objectives

• Understand the perspectives of African countries on the criticality of their mineral resources. What are their interests and priorities (industrialisation, clean energy development, local and regional value chain development, energy security, and broader sustainable development objectives)?
• Discuss the implications for African countries of projected increase in global demand for critical minerals, and the risks associated with the corresponding projected increase in mining activities in African countries over the next decade (uncertainty, price volatility, a new green curse, environmental damage, corruption, etc.)
• Improve understanding around the opportunities for local value addition and associated policy options to develop local downstream industries. How effective have African policy approaches to local value addition in the mining value chain fared (e.g. export control measures)?
• Explore avenues for new forms of international cooperation that offer an alternative to the traditional export-driven development model by delivering sustainable investments, technology transfer, capacity building and financing, through negotiations between equals. For example, the “strategic partnerships” at the heart of the EU Critical Raw Materials Act, the  Partnership on Minerals for Future Clean Energy Technologies between the United Kingdom and South Africa to promote increased responsible exploration, production and processing of minerals in South and Southern Africa, and the Memorandum of Understanding between the USA, DRC and Zambia to support the production of electric vehicle batteries in the DRC and Zambia.
• Discuss how the 2021-2027 EU strategy “The Global Gateway“ and its €300 billion pocket of funding for infrastructure development can be leveraged to enable the development of mineral refining and processing capacity as well as the energy and transport infrastructure required to support sustainable development in  Africa and a diversified, reliable and resilient supply of critical minerals for the transition.
• Discuss how mining can be a catalyst for sustainable development – for example, as an anchor for renewable power generation, local procurement of goods and services, and shared use of infrastructure, as a driver for inclusive development, jobs, and innovation, and underpinned by a transparent governance framework, with safeguards against corruption and mechanisms to ensure equitable revenue generation, distribution, and use. 

Moderator

Ragnheiður Elín Árnadóttir, Director of the OECD Development Centre

Opening remarks

Gyude Moore, Senior Policy Fellow, Center for Global Development (CGD)

Keisuke Sadamori, Director, Energy Markets and Security, International Energy Agency (IEA)

Panelists

H.E. Antoinette N’Samba Kalambayi, Minister at the Ministry of Mines, Democratic Republic of Congo

Hon. Kornelia Shilunga, Deputy Minister at the Ministry of Energy and Mines, Namibia (TBC)

Hon. Paul C. Kabuswe MP, Minister at the Ministry of Mines and Minerals Development, Zambia

Richard Morgan, Head of Government Relations at Anglo American

Fred Kabanda, Division Manager, Extractives, African Natural Resources Management and Investment Centre (ANRC), African Development Bank (AfDB)

Silas Olan’g, Africa Energy Transition Advisor, Natural Resource Governance Institute (NRGI)

Closing remarks

Ragnheiður Elín Árnadóttir, Director of the OECD Development Centre

Vanessa Ushie, Acting Director, African Natural Resources Management and Investment Centre (ANRC), African Development Bank (AfDB)