Critical minerals, which include non-fuel minerals essential for specific supply chains—such as weapons systems, renewable energy, advanced electronics and medical devices—are becoming increasingly vital to the global economy. While there’s no universally agreed-upon list, materials like chromium, cobalt, graphite, lithium, manganese, nickel, platinum, titanium and zinc are generally recognized as critical. Additionally, lesser-known minerals like bismuth, germanium, and terbium also play crucial roles in various advanced technologies. In 2022, the US Geological Survey published an updated list of 50 critical minerals.
Rare earth elements, a specific category of 15 critical minerals, are also crucial for technologies like electric vehicles (EVs) and wind turbines. Despite some, like cerium and lanthanum, being geologically common, others like neodymium and praseodymium are essential for producing strong magnets.
Soaring demand for critical minerals
The demand for these minerals is expected to surge in the coming decades. According to the International Energy Agency, global demand for lithium is predicted to increase tenfold, cobalt demand is expected to triple, and nickel demand will likely double between 2022 and 2050. Additionally, the Brookings Institution forecasts that global demand for rare earth elements will rise from 125,000 tonnes in 2021 to 315,000 tonnes by 2030.
Africa plays a significant role in this demand surge, providing a substantial but uncertain portion of the critical minerals that have fueled the growth of global EV production and other emerging industries. The IMF estimates that sub-Saharan Africa holds approximately 30% of the world’s proven critical mineral reserves. For instance, South Africa, Gabon and Ghana produce 60% of the world’s manganese, while Guinea controls the global supply of bauxite, the raw material for aluminum production.
One of Africa’s key advantages lies in its lithium reserves. Although the continent currently holds about 5% of global reserves, limited exploration suggests the actual figure could be much higher. At least nine lithium mining projects are underway in Africa, including in DR Congo, Ghana, Mali, Namibia and Zimbabwe.
While Africa is believed to have substantial rare earth reserves, exploration has been limited. However, projects are beginning to emerge, such as South Africa’s Steenkampskraal mine, which contains 15 different elements, including large deposits of neodymium and praseodymium. This mine is expected to start production in early 2025. In Namibia, Australia’s Bannerman Energy holds a 41.8% stake in Namibia Critical Metals, which produces 2,000 tonnes annually of dysprosium and terbium at its Lofdal heavy rare earths project.
China’s role in Africa’s critical minerals sector
Chinese mining companies play a significant role in Africa’s critical minerals sector. According to the Wilson Center, Chinese firms account for about 8% of Africa’s mining output, which is less than half the output of Anglo-American alone. However, Chinese investment has been heavily concentrated on critical minerals. For instance, Chinese companies have invested significantly in DR Congo, securing access to minerals in exchange for infrastructure investments.
In 2023, Kinshasa challenged Chinese companies Sinohydro and China Railway Group over their failure to deliver on promised infrastructure, such as roads and hospitals. New deals were signed in March, allowing these companies to retain a 68% stake in the Sicomines cobalt and copper joint venture with DR Congo’s state mining company Gecamines. In return, the companies agreed to pay 1.2% of all revenues to Kinshasa and allowed Gecamines to market a third of Sicomines’ production.
Another Chinese company, CMOC, agreed last year to pay Gecamines $800 million by 2028, along with $1.2 billion in dividends over the lifetime of its Tenke Fungurume cobalt and copper operation, which produces 12% of the world’s cobalt. After opening its Kisanfu mine in DR Congo in mid-2023, CMOC overtook Glencore to become the world’s largest cobalt producer, with annual production jumping 174% to 55,526 tonnes, out of a global consumption of 213,000 tonnes. The importance of cobalt to EVs is underscored by the fact that Chinese battery producer CATL owns a minority stake in Kisanfu.
Zimbabwe is the world’s sixth-largest lithium producer, with Chinese companies heavily investing in the sector. Zhejiang Huayou Cobalt has invested $300 million in the Arcadia lithium mine, and companies like Sinomine Resource Group and Chengxin Lithium Group have also acquired lithium assets in the country. Zimbabwe aims to use its lithium reserves to kickstart a domestic battery manufacturing industry and possibly even EV production. China’s Tsingshan Holdings plans to build a lithium ore processing plant in Bulawayo and has agreed to help upgrade Zimbabwe’s railway network to facilitate broader mine development.
African Governments’ response and strategic moves
Africa’s focus on critical minerals has been in place for years, exemplified by the African Mining Vision (AMV) established in 2009, which called for the “transparent, equitable, and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development.”
However, only recently have African governments taken more active policy measures to position critical minerals supply within global supply chains and address domestic demand. In December 2022, Zimbabwe banned the export of raw lithium to ensure more of the mineral’s value chain benefits are retained within the country. On the demand side, Ethiopia recently banned the import of non-electric vehicles, hoping to spur local EV demand.
Morocco, the only North African country with its own supplies of EV battery metals, is working to build a closed-loop EV supply chain to pivot its existing automotive industry towards EVs. Moroccan company Managem now supplies BMW with 20% of its cobalt requirements. Given Morocco’s focus on supplying vehicles to the EU market, the country is well-positioned to benefit from the EU’s switch to EVs.
In April 2023, DR Congo and Zambia signed an agreement to jointly develop value chains in the electric battery and clean energy sectors, including the creation of special economic zones (SEZs) focused on EV production. These SEZs will integrate all parts of the supply chain, from battery precursors to EV manufacturers. Pan-African infrastructure developer Arise Integrated Industrial Platform is conducting pre-feasibility studies for these projects, with technical advice from the United Nations Economic Commission for Africa (UNECA). Afreximbank’s impact fund subsidiary, the Fund for Export Development in Africa, is expected to support the projects.
DR Congo controls 88% of global cobalt supplies, while DR Congo and Zambia jointly account for 11% of global copper production. These resources position them as key players in the global critical minerals market.
While these developments are promising, questions remain about whether Chinese firms will support African countries in maximizing the benefits of their critical minerals production. Concerns have been raised that China’s efficient domestic supply chains may hinder value addition on the African continent. The upcoming Forum on China-Africa Cooperation (FOCAC) meeting in Beijing in September 2024 may offer new incentives or policy directions to address these concerns and enhance Africa’s role in the critical minerals supply chain.
