Africa has the potential to play a pivotal role in the global energy transition, thanks to its rich reserves of critical minerals like lithium and cobalt. However, realizing this potential requires a strategic focus on developing manufacturing capacity and scaling production and exports.
This insight emerged during a panel discussion at the recent Manufacturing Indaba, where experts explored how resource extraction and industrialization can enable African countries to enhance their value chains, create high-skilled jobs, and foster technological innovation.
Gaylor Montmasson-Clair, a senior economist at Trade and Industrial Policy Strategies, emphasized the need to explore diverse pathways for value addition: “We need to think about how to deepen those value chains and leverage critical minerals toward beneficiation and manufacturing. It’s not a linear pathway.”
Thami Moatshe, executive head of the Localisation Support Fund, highlighted the abundance of critical minerals as an opportunity for African countries to enhance industrialization and economic diversification. She pointed out that establishing new industries will necessitate upskilling the current workforce, which presents a significant job creation opportunity.
Moatshe also underscored the importance of the African Continental Free Trade Area and regional collaboration in harnessing mineral resources, positioning South Africa as a potential regional hub. She urged African countries to proactively prepare for the rising demand for critical minerals: “We should not just rely on exporting minerals but focus on processing and producing components locally.”
Despite the potential for manufacturing, Moatshe noted that locally produced goods often struggle against cheaper imports, which diminishes demand for homegrown products. She called for government interventions to enhance competitiveness: “Competitiveness is key to securing demand, and it must be supported by additional measures.”
Hilton Lazarus, head of the strategic business unit for basic and specialty chemicals at the Industrial Development Corporation of South Africa, added that expanding Africa’s battery minerals value chain to include battery assembly and component manufacturing would require significant investment. This necessitates collaboration, clear regulatory frameworks, and incentives to attract investors.
Finally, both panelists stressed the importance of addressing electricity supply constraints, as a stable and affordable energy supply is crucial for supporting industrialization and beneficiation in Africa.
