The continent is critical for the transformation required by the global green revolution agenda, driven by climate change imperatives and the rapid shift towards clean energy technologies.
The demand for green minerals, such as lithium, cobalt, copper, nickel, graphite and rare earth elements continues to increase, driven by the rise of electric vehicles, renewable energy systems and energy storage solutions globally.
There is a good opportunity for Africa to become a global hub for critical mineral processing and the production of green technologies through a vertically integrated value chain.
This would include mining, processing, manufacturing and technology development. As a result the continent finds itself at the heart of global geopolitical and economic tensions between major countries and regions.
That is why allies in the developed regions, such as the US and the EU, are prioritising the development of bilateral agreements with individual emerging producers to secure critical mineral supply.
They are also using industrial policies, like the US’s Inflation Reduction Act (IRA) and the EU Critical Raw Materials Act, to promote domestic value addition.
The IRA makes it difficult for US companies to set up manufacturing plants in Africa, as eligibility for incentives only applies to companies that establish plants in the US.
While on the other hand the EU Critical Raw Materials Act aims to secure the supply of critical raw materials for the region, with provisions for 40% of its critical minerals to be processed domestically and the remainder processed outside the region under strict conditions.
The EU Critical Raw Material Act has set strict rules which may be difficult for developing countries to meet, including ESG standards, traceability and due diligence requirements.
The shifts in geopolitics surrounding the race to secure critical minerals are reshaping investment flows and strategic priorities.
Therefore, endowment with mineral reserves alone, without clear policy frameworks, is inadequate if Africa aims to increase its participation in downstream activities for value addition and to assert any geopolitical influence.
The geopolitical rivalry raises important questions for Africa as it seeks to advance its resource-based industrialisation.
The continent requires a common vision and approach to critical minerals governance and development before negotiating with developed economies.
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