Africa’s mineral strength is wasted if countries don’t work together – new report

Green technologies are mineral-intensive: electric vehicles, batteries, solar panels, wind turbines and grids need cobalt, lithium, copper, manganese, graphite and rare earths. The International Energy Agency estimates that electric cars require six times more minerals than a petrol or diesel car. A wind power plant requires about nine times more minerals than a gas-fired plant. As the global green transition speeds up, the growing demand for green technologies and minerals creates an opening for Africa, which has deposits of several of the minerals needed. Read more: Zimbabwe’s lithium is in demand for making batteries: how to make sure benefits flow to the local economy Yet just having these minerals in the ground does not automatically create industries or shared prosperity. In fact, developing countries endowed with minerals often struggle to benefit economically from mining. We are scholars of how countries build industries and reshape their economies. Our latest study, commissioned by the World Bank, explored how far African countries have moved beyond mining the minerals needed for the energy transition. We examined whether they are processing and refining these minerals or making components for green technologies that use them. Our analysis followed four steps. First, we identified the transition minerals found in each African country. Second, we examined trade data to see which countries export these minerals and where they are sold. Read more: A new class of metals could transform Africa’s clean energy economy – scientists explain Third, we looked at where African countries participate in the value chain of green technology. We wanted to find out whether they only mine the mineral and then export it raw, or whether they process it before selling it or produce a final product for sale, such as solar panels. Fourth, we reviewed national and regional mineral and industrial policies. We found that African countries have deposits of 41 minerals that are used across bioenergy, electricity networks and infrastructure, batteries, energy storage and electric vehicles, and carbon capture and storage. These minerals are also sought after for fuel cells and hydrogen, geothermal energy, heat pumps, hydropower, nuclear power, solar power and wind power. However, most African countries still export transition minerals in raw or lightly processed form rather than turning them into higher-value materials, components and finished products. Read more: Has finance for green industry had an impact in Africa? What’s happened in 41 countries over 20 years African countries therefore have only a very small presence in the green-technology industries that depend on these minerals. As a result, Africa’s mineral wealth has not yet led to high levels of industrial activity, well-paid jobs, higher incomes or wide improvements in living standards. We found that national and regional institutions are taking steps to change this, but most initiatives are still at an early stage. Collective mineral strength, shallow value capture Our research found deposits, reserves, or production of at least one transition mineral in 48 African countries. South Africa had 24 of the 41 minerals; Nigeria and the Democratic Republic of Congo (DRC) each had 14. The number of green transition minerals per country. Courtesy World Bank. Collectively, Africa holds about 96% of global platinum group metal reserves, 77% of phosphate reserves, and 55% of cobalt reserves. Phosphate and cobalt are used in electric vehicle batteries, while platinum is used in technologies that produce and use green hydrogen. Yet most countries individually accounted for only small global shares. This matters because small national volumes can make it harder for a country acting alone to influence buyers, attract large processing plants, build complete supply chains or compete with established producers elsewhere. Read more: DRC is the world’s largest producer of cobalt – how control by local elites can shape the global battery industry Trade data reinforces these findings. Notably, apart from South Africa, Nigeria and the DRC, most African countries exported less than 1% of each mineral globally. For several minerals, such as nickel, rare earths, silver and lithium, Africa’s five largest exporters together supplied less than 10% of world exports. African countries could strengthen their position in mineral markets by coordinating their trade policies rather than acting separately. Private companies hold mining licences, but permission to extract minerals does not always include an unrestricted right to export them. Governments may therefore have some scope to coordinate trade rules. How this would work alongside companies’ existing rights, and whether it would require their agreement, needs to be further studied. Read more: Lithium in the Sahel: how armed groups are exploiting the global scramble for the critical mineral A deeper weakness identified in our study is limited local processing of minerals. This mainly happens in a few countries such as South Africa, Democratic Republic of Congo, Zambia and Zimbabwe. The processing these countries do often involves crushing and concentrating ore, rather than making products from the mineral. African countries lose out because of this. For example, Congolese cobalt can sell for US$5.80 per kilogram at the point of extraction. But after local refining, the price increases to US$16.20 per kilogram, nearly tripling its value. A green economy built on old dependencies Asia (China in particular) is the leading importer of 16 minerals from Africa. It imported over 30% of those exports on average, and was the second biggest buyer of six other green transition minerals. Our research found that China absorbed over 40% of Africa’s annual mineral ore exports. This shows that Africa is repeating a familiar pattern: mining raw materials while other countries turn them into more valuable products. Read more: China and the US are in a race for critical minerals. African countries need to make the rules The history of Africa, plus low industrialisation levels, means that African countries are also almost invisible in green technology value chains. Between 2017 and 2023, Africa’s global patent share across the technologies studied remained below 0.4%, while its export share was below 1% in every category. African countries currently participate in the green economy more as consumers, rather than producers. African governments are asserting agency We also found that African governments are changing mining laws, restricting exports, taking ownership stakes and forming partnerships to gain more from their minerals. They want more processing, investment, jobs and income to stay at home. Most are acting individually, although some are working together across borders. Acting alone has limits. Many countries supply too little to influence large international buyers. If one country demands higher prices or local processing, buyers can shop elsewhere. Many also lack reliable electricity, affordable loans, transport and skilled workers to process minerals and make components. What needs to happen next Africa is very strong in minerals as a continent. However, deeper regional cooperation would help African countries build industries, not simply trade more easily with one another, a central thesis of a related study, Integrating Africa: From Threads to Hubs. Pooling mineral supplies, markets, infrastructure and skills could lower costs and give them more power when negotiating with global companies. A shared processing centre serving countries across Africa would also help the continent. Read more: Why Africa needs a green bank to fund climate action and build its own renewable technology To make this happen, African finance and mineral institutions and national governments must agree on common priorities and similar rules about how minerals are processed, and how environmental damage is managed. Development finance has a role to play. Regional development banks and other African financiers could help fund shared electricity, transport and mineral-processing infrastructure, while universities and businesses develop the technical skills these industries need. Partnerships with foreign governments and companies should also go beyond extracting and exporting minerals. They should include commitments to process more minerals in Africa, share technology and know-how, train workers, and help local firms become suppliers to emerging green industries.