Global Race is ON for Critical Minerals as the Focus Shifts to Africa's Resources

Global Race is ON for Critical Minerals as the Focus Shifts to Africa's Resources

Sept. 15, 2024

U.S. IMPERIALISM - FOLLOW THE MONEY

Lena Petrova

The world's journey to a de-carbonized energy future requires a shift towards the development of low-carbon technologies.

The development of these low-carbon technologies in the areas of solar power, electric vehicles, battery storage and green hydrogen are driving an increase in the production of minerals and metals such as copper, lithium, nickel, cobalt, graphite, and rare earth elements, collectively known as critical minerals.

As this demand intensifies, it could offer untold opportunities for resource-producing regions like Africa.

In the past five years, the demand for critical minerals has seen the market double, reaching $320 billion in 2022. In the past year alone, the demand for lithium has risen by 30 per cent.

Demand is projected to continue on this trajectory, more than doubling again by 2030 and quadrupling by 2050. Annual revenues are projected to reach $400 billion by 2050.

Critical minerals therefore present trade and investment opportunities for countries with reserves.

For example, it could revolutionize African economies — a region rich in natural resources but which is all too often exploited in the global scramble towards a clean energy transition.

THE SCRAMBLE FOR AFRICA'S CRITICAL MINERALS

Africa holds 30 per cent of the world's critical mineral reserves, many of which are critical components of many clean energy applications.

The Democratic Republic of Congo (DRC) dominates the global cobalt market with over 70 per cent of global output and approximately 50 per cent of the world's proven reserves.

South Africa, Gabon and Ghana collectively account for over 60 per cent of global manganese production. In addition, lithium is produced in Zimbabwe, South Africa, DRC and Namibia. Ghana and Mali will soon start producing lithium in commercial quantities.

Chinese mining companies produce about 90 percent of the lithium from Africa and production is expected to triple in 2024 reaching 10 per cent of the global supply, compared to 2023 when the region contributed only 4 per cent to global lithium production.

China currently dominates the production of these critical minerals in Africa, as well as global supply chains.

As the leading producer of 20 critical raw materials, China accounts for approximately 60 per cent of worldwide production and 85 per cent of processing capacity.

This gives China a geo-strategic presence and influence in Africa allowing it to further leverage its competitive advantage in global supply chains.

China already wields this market power in coercive ways by placing restrictions on critical minerals trade, blocking supply to Japan and threatening the supply chains of US defense contractors.

China's dominance in the production of critical minerals poses geo-political and mineral security threats to European economies, whose response is to adopt policies aimed at diversifying their supply chains.

For instance, the U.S. in December 2022 signed a joint strategic partnership with the DRC and Zambia on critical minerals value chains. The EU signed two strategic partnerships with the same countries on critical minerals in October 2023.

In June 2024, the South Korean government pledged to increase development aid for Africa to $10 billion over the next six years as it looks to tap the continent's rich mineral resources.

https://www.downtoearth.org.in/africa/will-critical-minerals-be-another-poisoned-chalice-for-africa

Original: https://youtu.be/wh6IOBvYW3U

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