The first day of the Critical Minerals Africa 2023 summit on Tuesday – organized by Energy Capital & Power (www.EnergyCapitalPower.com) – featured a series of presentations from leading industry experts, providing unparalleled insights into Africa’s critical mineral reserves and geopolitical position in the global mining economy. The main conference program begins on Wednesday, October 18 and will feature a highly anticipated ministerial forum, investor briefings and panel discussions, taking place alongside African Energy Week in Cape Town.
Kicking off the agenda was a presentation by South African Institute of International Affairs (SAIIA) exploring the future of critical minerals in the SADC – namely, copper in the DRC, South Africa and Zambia, lithium in South Africa and Zimbabwe, cobalt in the DRC and Zambia, graphite in Mozambique, manganese in South Africa, and nickel in Madagascar, South Africa and Tanzania. The ability to harness these reserves depends on several factors, including growing geoeconomic competition among China, the US and Europe, the ability of SADC states to manage regional value chains, and the urgency of global policy action toward renewable and low-carbon energies.
“In 20-30 years, not only will these minerals be in high demand, but how we put systems in place will be important,” stated Dr. Deon Cloete, Head of SAIIA’s Futures Program. “We have focused on Rare Earth Elements (REEs) and the need to scale up exploration and extraction and develop the entire value chain. The transition to climate goals by 2050 is challenging and we need to be critical about how these fault lines are emerging. We propose a resource-based economy that challenges the paradigm of how we approach mining.”
The Critical Minerals International Alliance (CMIA) built upon the geopolitical nature of critical minerals development during its presentation, addressing China’s race to solidify its leadership on the continent and its successful dual-pronged investment approach. Western nations have sought to counter this influence through various policy measures, including the US’ Inflation Reduction Act, the EU’s Critical Raw Materials Act and the Minerals Security Partnership, which seeks to secure a stable supply of raw materials for member economies.
“When we talk about critical minerals, we are focused on geopolitics — how they frame supply chains and influence pricing and how monopolies are increasingly changing the industry,” said Olimpia Pilch, Founder and COO of CMIA. “In a supply chain crunch, who gets priority and which industries will miss out? Those who have put in the work to have their own supply chain will be in a much better position.”
On the need to diversify mining supply chains, Roberto Cecutti, Head of Trade and Economics, EU Delegation to South Africa, stated during his presentation: “In terms of annual consumption, we have an aspirational target of covering at least 10% of extraction in Europe, 40% of processing and refinement and 15% of recycling capacity. We want to avoid dependence on the supply of one or more specific countries…This is why we have set this target, in which 65% should not depend on a specific country of origin of supply.”
“Each region has its own definition of what is ‘critical,’ and what’s critical for Africa may not be what’s critical for the EU and vice versa. Africa has different requirements when it comes to minerals,” noted Sodhie Naicker, Managing Director: DMT Kai Batla and Consortium Partner: AfricaMaVal.
Energy research firm Rystad Energy also explored Chinese dominance within the low-carbon supply chain, as the country produces almost 90% of solar panels and is currently ramping up production of wind turbines. While Europe has made gains towards establishing its own clean energy supply chain, Africa remains reliant on imports to meet growing energy demand, despite having vast renewable energy potential and untapped mineral reserves.
“The resource potential for solar generation in Africa is more than enough to satisfy the needs of the planet – it’s enormous,” said Per Magnus Nysveen, Senior Partner & Head of Analysis for Rystad Energy. “You can find sites for mining every mineral in sub-Saharan Africa.”
A presentation from Steenkampskraal – operator of the Steenkampskraal Mine in South Africa’s Western Cape – underscored the continent’s resource potential and its evolution into a critical and industrial minerals hotspot. The mine is home to one of the highest grades of REEs globally, is licensed to operate and possesses well-developed underground infrastructure with a low-capital, three-stage development plan.
“Not even 20% of the known resources have been mined,” emphasized Graham Soden, Director, CEO & Mine Manager of Steenkampskraal. “It puts the project at a unique level. It’s fully legislative compliant, and we can get it up and running within one year.”
The agenda concluded with a presentation by Trade & Industrial Policy Strategies (TIPS), which explored opportunities to develop vanadium redox battery (VRB) manufacturing in South Africa and to position the country as a key player in the global battery value chain, with a view to exporting to other African and international markets. Demand for VRBs has skyrocketed in recent years – largely from China, Japan, Europe and the US – resulting in over 30 new VRB projects installed in 11 countries since 2014.
“Cell battery manufacturing remains to be proven competitive in South Africa. We have the industrial capacity, but we don’t have a commercialized production,” said Lesego Moshikaro, Senior Economist for TIPS. “When you look at the short- to medium-term, South Africa cannot be competitive along the whole value chain, so it’s important for us to choose key areas where we can excel.”
