DEVELOPMENT AND OUTLOOK OF AFRICA’S LITHIUM LANDSCAPE
As countries around the world prioritise the global energy transition, demand for lithium - a critical resource for battery material production - has increased exponentially, driving up prices.[i] Countries in Africa, a continent rich in lithium resources, are geared to take advantage of the opportunity. Africa has significant natural lithium resources, which may allow many African countries to contribute to meeting increased demand, while also supporting economic growth. With the exception of Zimbabwe, Africa is currently a relatively immature lithium producer. However, recent discoveries are positioning Africa as a major contender in global lithium supply.[ii]
LITHIUM IN AFRICA
To meet global net zero ambitions, energy and transportation decarbonisation will necessitate significantly increased amounts of raw materials used to manufacture batteries and other green technologies.[iii] One of the most important battery raw materials, lithium, is expected to grow rapidly in the coming decades.[iv]
Lithium, also known as "white gold," is the periodic table's lightest solid element.[v] Because of its high electrochemical potential, it is essential for electric vehicle batteries.[vi] It is extracted from Latin American brines or hard-rock ore bodies in Australia, the world's leading producer, and other parts of the world, including Africa and China.[vii] Because lithium is abundant on Earth, there should be enough to go around if money is invested in the right projects. Its demand increased to 559,000 metric tons in 2022, up from 263,000 metric tons in 2019.[viii] By 2025, these figures would have risen to around 1 million metric tons. A tonne of lithium cost more than $78,000 last year, up from around $6,000 in 2020. According to the World Bank, demand for lithium will triple by 2040.[ix]
Lithium supply chains are complicated and often global in scope, with steps such as exploration, mining, processing, manufacturing, use, and recycling.[x] As stated, Africa has significant natural lithium resources, which may allow many African countries to contribute to meeting increased demand, while also supporting economic growth.[xi] Many African countries have lithium resources and the potential for lithium mines, most notably Zimbabwe, Namibia, Ghana, the Democratic Republic of the Congo, and Mali.[xii] However, there is much less engagement at the critical stages of the supply chain. Africa currently has very little capacity for processing lithium minerals, further refining lithium chemicals, or manufacturing battery components.[xiii] This typically results in mineral concentrate being exported; hence, value is added outside of Africa, and products utilising lithium-ion batteries are subsequently imported.
The Arcadia lithium project, located near Harare, Zimbabwe, is one of the world's largest hard rock lithium resources, with a mine life estimated to be 12 years.[xiv] The lithium mine will be built with a processing plant capable of processing 4.5 million tonnes of ore and producing 400,000 tonnes of lithium concentrate per year.[xv]
The Ewoyaa lithium project is expected to be Ghana's first lithium-producing mine[xvi]. The project has an estimated mineral resource of 14.5 million tonnes at a grade of 1.31% lithium oxide.
Ming Xin Mineral Separation Nig Ltd. (MXMS) of China is developing the Kaduna Lithium project, the first of its kind in Nigeria, with the goal of producing batteries for electric vehicles (EVs).[xvii] The plant is being built on 9.3 hectares of land in Kaduna State and is scheduled to commence in April 2023, according to the mining company.
Sub-Saharan Africa's potential to be a major global lithium production hub is becoming more evident. And, because Africa has sufficient supply of this valuable resource, it can use it to accelerate socioeconomic development and the transition to a green economy.[xviii] This awareness has given rise to the buzzword 'beneficiation' in the African mining discourse, which proposes that African countries should first add value to their own minerals rather than exporting raw materials and earning relatively little in return - as has been done historically and till date.[xix] African nations should process and sell the products at much higher prices around the world, and use the proceeds to accelerate their economic growth. Nigeria adopted this approach, when it denied Tesla Inc's request to mine lithium, unless the company establishes a battery-making factory in the West African country in order to retain value along the global lithium processing chain.[xx]
In general, as Africa begins to thrive in lithium exploration, it is critical that it be developed in a sustainable and responsible manner, taking into account the social and environmental impacts of mining activities.
CONSIDERATIONS
Following the ‘beneficiation’ awareness in the mining discourse in Africa, the continent must prepare itself not only to be a producer of lithium, but to also partake in the supply value chain of lithium batteries, and as such, some considerations must be taken into account in this regard[xxi]:
· Feasibility studies on the establishment of an African battery manufacturing value chain: According to recent findings, Africa possesses all of the ingredients required for the various chemical components of lithium ion battery production. To attract the necessary funding, a feasibility study should be conducted to assess country readiness and how it can benefit from the various segments of the value chain: raw materials, refining, battery assembly, etc. Each country's readiness will be assessed based on criteria such as innovation, capital raising, manufacturing, energy resource availability, governance, etc. Based on this, the study will identify countries that have already developed capacity in these areas, alongside what other countries can do to develop capacity and readiness. The results of the study will inform a regional approach to battery manufacturing in Africa.
· Framework linkages with the economy: African countries must implement systems that promote economic development, starting with good governance. National economic (and monetary) policies, infrastructure and logistics development, transparency, education, and communication are major state institutional functions that promote value chain development. If any of these state functions are weak, the pillars for value chain development will also be considered weak.
· Investment promotion strategies: The ideal next step in developing the lithium industry sector is to foster an environment that encourages open and transparent investment. African countries with mineral resources should implement policies that encourage value chain development, such as providing incentives to companies that consider investing and participating in the value chain.
· Joint Ventures: African countries should use their vast resources to create synergies with major battery consumers such as Samsung, Tesla, and LG. States should encourage local entrepreneurs to form joint ventures with seasoned Western firms. Following China and Japan's fast-track industrialisation model, having indigenous players participate in the supply chain is the best way of transferring knowledge and skills for local content promotion. Miners in developed jurisdictions are increasingly forming joint ventures or devising offtake agreements to facilitate the development of the entire value chain.
· Environmental impacts: According to life-cycle assessments, the mineral processing stage has a much greater environmental impact (in terms of greenhouse gas emissions) than mining and transportation. This is largely due to the amount of energy required for the process and the extensive use of chemicals. The use of renewable energy as opposed to fossil fuels can have a significant impact on overall assessment.
CONCLUSION
Few African countries are involved in lithium supply chains for batteries. This is despite the fact that several African countries have well-known lithium resources. As global demand for lithium for batteries rise in the coming years, it is highly likely that some current exploration projects will be developed into mines. However, these mines will most likely produce mineral concentrates that will be exported outside of Africa for further refining. There are however significant opportunities for African countries to participate more broadly in various stages of the lithium supply chain, but this will necessitate cooperation and the implementation of strong environmental, social, and governance principles, alongside the development of infrastructure, capacity, and skills.
[i] Charne Hollands, Africa’s Lithium Landscape: Promising Developments and Future Outlook (April 21, 2023) < https://energycapitalpower.com/lithium-africa-developments-future-outlook/ > accessed 28th April 2023.
[ii] Ibid
[iii] Kathryn Goodenough, Eimear Deady and Richard Shaw, Lithium resources, and their potential to support battery supply chains, in Africa. Available at https://nora.nerc.ac.uk/id/eprint/530698/1/Lithium_in_Africa_Report.pdf
[iv] Ibid
[v] How China is winning the race for Africa’s Lithium. Available at https://www.ft.com/content/02d6f35d-e646-40f7-894c-ffcc6acd9b25
[vi] Ibid
[vii] Ibid
[viii] Adekunle Agbetiloye, 5 Ongoing Lithium Projects in Africa. Available at https://venturesafrica.com/5-ongoing-lithium-projects-in-africa/
[ix] Ibid
[x] [x] Kathryn Goodenough, Eimear Deady and Richard Shaw, Lithium resources, and their potential to support battery supply chains, in Africa. Available at https://nora.nerc.ac.uk/id/eprint/530698/1/Lithium_in_Africa_Report.pdf
[xi] Ibid
[xii] Ibid
[xiii] Ibid
[xiv]Adekunle Agbetiloye, 5 Ongoing Lithium Projects in Africa. Available at https://venturesafrica.com/5-ongoing-lithium-projects-in-africa/
[xv]Ibid
[xvi] Ibid
[xvii] Ibid
[xviii] Ibid
[xix] Ibid
[xx] Ibid
[xxi] Lithium-Cobalt Value Chain Analysis for Mineral Based Industrialization in Africa. Available at https://africa-energy-portal.org/sites/default/files/2022-02/lithium-cobalt_value_chain_analysis_for_mineral_based_industrialization_in_africa_report.pdf