We established that while Africa remains a minor player in the LIB GVC, it has significant potential to participate more, especially in the SADC region. A significant amount of the global supply of crucial minerals for the batteries of electric vehicles are mined in the Democratic Republic of Congo, Zimbabwe, Mozambique, Zambia and South Africa by firms with capabilities for greater beneficiation before exporting them. The case for more mineral beneficiation is robust. But the evidence suggests cell production, other than for the local market, may not be globally competitive.
There are significant constraints around infrastructure, logistics, financing, and the policy environment that may yet make that a long shot. In fact, only mineral refining and battery manufacturing have been found to be scalable, at the moment; and only in South Africa at that. Even so, no firm in South Africa currently produces LIB cells commercially at the moment. But there is already a vibrant South African battery manufacturing industry that relies on imported cells.
African governments would need to be more assertive with the global mining firms in their jurisdictions towards the beneficiation goal, moving from just policymaking to actual industrial policy implementation. The dominant Chinese firms could almost certainly be steered towards reconfiguring their operations for more African participation. There is evidence of willingness for such partnerships if credible local partners make the move, as is the case with South Africa’s Megamillion, for instance.
But even with such partnerships, it may be more economically sensible to import the cells, rather than produce them locally, over the short to medium term. There are simply not enough economies to justify the significant investment and knowhow that would be required otherwise; especially for an industry where knowhow is still in its infancy and rapidly evolving. Thus, current cell production pilot schemes may likely not evolve into large scale facilities anytime soon.
It is probably still decades ahead before there could be enough local demand to warrant significant investment in a fully integrated LIB manufacturing operations on the continent. Actually, a giga factory under the current conditions may ironically fit the tag of a white elephant project. But to the extent that battery mineral producers elsewhere also refine them before exports, there is no reason why that should not similarly be the case on the African continent. The in situ beneficiation of LIB minerals to battery-grade metals on the continent is a no-brainer. But even as that is obvious, some of the holdups are coming from governments that should ordinarily be doing their utmost towards facilitating beneficiation.
We suggest the following to firms and governments towards the goal of greater African participation in LIB GVCs.
1. Firms should position early
There is currently an opportunity for positioning early now ahead of an eventual take off of EVs across the continent and the associated value chain activities that would come with it. From now till 2030, the beneficiation of minerals to battery-grade metals is an opportunity that firms can tap into right away. There is currently a strong desire by global firms to reduce dependence on China for LIB metals. But this is not so much a country-specific antipathy as it is a geographic one.
The diversification objective of non-Chinese firms would probably still be served if refined LIB metals were to be supplied by a Chinese-owned refinery in the DRC, say. Beyond 2030, the potential opportunities take on wider dimensions. A recycling of LIBs on the continent would probably take on greater importance and urgency by then, and thus become a lucrative opportunity.
But waiting till 2030 onward might not be wise. Best to start the groundwork early, ahead of the potential opportunity years later. The various joint Singaporean chambers of commerce across the African continent, especially in the SADC region, could ideally be the vehicle for facilitating this early positioning. There is also much that Singaporean industrialists and government policymakers could offer to African governments, in terms of advice and facilitation on industrial policy towards the greater local LIB GVC participation goal.
Read also: Electric Vehicles: Africa’s battery minerals and GVC opportunities (4)
2. Governments should provide much needed support
There is much that African governments would need to do to encourage firms to add more value to LIB minerals in situ like they do elsewhere. Firms would hardly be enthused to do so if it is more expensive. Governments should certainly not be imposing taxes that add to the costs of imported feedstock, for instance.
The Zambian Chambishi Metals refinery case highlights the potential holdups around developing a regional LIB GVC in the SADC region when governments are not aligned with the vision. So even as the economic case for beneficiation is clear, some of the constraints are local and unwisely self-imposed.
In fact, within SADC, only the South African government seems to be making significant efforts towards the greater African LIB GVC participation goal (Foli, 2020). The Zambian government, which seeks greater beneficiation of its minerals as well, and has aligned its industrial policy with SADC’s, has by the Chambishi example not been matching its words with appropriate action.
And while like Zambia, Zimbabwe has similarly aligned its industrial policy with the sub-region, it does not specifically target LIB manufacturing or immediately available upstream LIB metals refining opportunities available to it.
Greater coordination by SADC and its member governments would be how firms know the vision of more advanced African participation in LIB GVCs is feasible and potentially worth the effort. Otherwise, interested firms may be better off just focusing on country-specific opportunities.
3. Battery consortia should collaborate
There are skills and financial capacity gaps that could be easily filled if battery consortia in Africa and other experienced continents cooperate. There are potential synergies to be had between the Singapore Battery Consortium (SBC) and South Africa’s Energy Storage Research, Development and Innovation Consortium (RDI), for instance. Certification and regulatory frameworks are immediate synergistic opportunities. SBC-member firm, Green Li-ion, which only recently pioneered a technology which recycles LIBs into almost 100 percent pure cathodes, could just as well begin exploring opportunities on the continent as it is currently doing in Dubai and China.
The opportunities for collaboration between the universities and think-tanks in both consortia are immediate and potentially enduring. SBC member, Nanyang Technological University (NTU), is already producing groundbreaking LIB research. Only recently, NTU scientists were able to successfully recover precious metals from battery waste using orange fruit peels and thereafter created functional batteries from the metals. The uYilo e-Mobility Programme at the Nelson Mandela University in Port Elizabeth, South Africa, which is also a member of the RDI, would be an ideal target for a potential partnership with NTU and SBC.
An edited version of this article was first published by Nanyang Business School’s NTU-SBF Centre for African Studies, Singapore. References, figures and tables are in the original article. See link viz: https://www.ntu.edu.sg/cas/news-events/news/details/electric-vehicles-africa-s-battery-minerals-and-gvc-opportunities
