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Africa’s vast reserves of critical minerals and renewable energy potential present a unique opportunity to build local value chains and drive green growth, experts highlighted at the Africa Investment Forum (AIF) in Morocco this December.
The continent is estimated to hold 95% of the world’s chromium, 90% of platinum group metals, two-thirds of cobalt, 30% of lithium and manganese, and 20% of graphite. With the electric vehicle and battery market projected to grow from $7 trillion in 2030 to $59 trillion by 2050, Africa is poised to play a pivotal role in this revolution.
African and Asian investors, entrepreneurs, and industrialists convened a panel discussion at AIF on capitalising on the surge in demand for Africa’s critical minerals driven by the green energy transition. Sponsored by the Japanese government and the Fund for African Private Sector Assistance (FAPA), the panel emphasised the importance of local processing and value addition. By processing minerals locally, Africa can not only increase the value of its exports but also create jobs and boost local economies.
Dr. Kodjo Busia, Executive Director of Green Africa Minerals, which operates in Tanzania and Dubai, noted that colonial-era patterns of raw material exports continued to persist long after many countries gained independence, citing the infamous structural adjustment policies of the 80s and 90s that failed to bring industrialization.
Shifting development model
He, however, expressed optimism that the paradigm was shifting. “African leaders have decided that it’s time to add value to our resources as a way of harnessing the whole venture of our natural resources.”
He highlighted that this shift is encapsulated in the 2008 Africa Mining Vision strategy, developed by the Mineral Development Center in Ethiopia, which began transforming export patterns through policy incentives, skills development, and regional value chains.
Samuel Olu Faleye, whose SAGLEV Inc manufactures electric vehicles (EVs) in Lagos, emphasized the surging demand for EVs: “It is virtually impossible in the last year to run ride-hailing without an electric vehicle.”
With over 6,000 ride-hailing drivers needing vehicles, he stressed the financing challenges: “The funding gap to fund electric vehicle buyers is just as high because the industry is changing so fast.”
Faleye advocated for blended financing and public-private partnerships to develop charging infrastructure, suggesting that industrial clusters could share power, services, and technical expertise.
Strengthening bilateral partnerships
Tatsushi Amano, Managing Executive Officer at Japan Bank for International Cooperation (JBIC), highlighted the evolving approaches in development finance, noting, “Nowadays, many of the Export Credit Agencies are moving toward the direction of development finance.”
He elaborated that JBIC has expanded its focus beyond supporting Japanese exports to financing projects that produce essential materials for Japanese industry. Amano pointed out funding is not the main challenge, but access to technical knowledge. “Gathering expertise on various issues will be essential for materialising tangible benefits,” he emphasised.
Catherine Zhang, Vice Chairman of the China Africa Business Council and President of Rockcheck Group, highlighting the growing trade ties between China and Africa, stating, “China and Africa have a significant relationship, with trade reaching $282 billion this year.”
Her company, founded by her parents 30 years ago, began with steel production and now imports over 10 million tons of iron ore annually, with Africa being a critical part of its supply chain.
Catherine Kim, Director of Corporate Relations at the South African Chamber of Commerce in Korea, discussed her country’s transformation from poverty in the 1960s to becoming a donor nation.
She emphasised Korea’s current supply chain vulnerabilities, stating, “87% of our production is based on trade, which means we are totally susceptible to supply chain issues.” This has driven Korean manufacturers to seek new partnerships in Africa, with companies like Samsung and LG investing in Zambia’s mineral sector.
Solomon Quaynor, African Development Bank Group vice president for private sector, infrastructure, and industrialisation, concluded the panel session with an emphatic reaffirmation of the Bank’s commitment to support local value addition of green minerals. “Africa is not going to really adopt the old industrialisation approach when it comes to the green minerals… We want to move up that value chain.”
He underscored Africa’s readiness for transformation through institutions like the Africa Finance Corporation and the African Development Bank. “We will put equity to work and we will raise the debt to support our transformation.”