By 2040, the demand for clean-energy technologies will necessitate a dramatic increase in the supply of critical minerals, with lithium needed 40 times more, graphite 25 times more, and nickel and cobalt 20 times more than in 2020. These minerals are crucial for batteries in smartphones and electric vehicles (EVs) and for the clean energy transition. The current critical mineral crisis, exacerbated by climate change, is intensified by the geographic concentration of these metals. For instance, the Democratic Republic of the Congo (DRC) holds about 80% of global cobalt reserves, while China controls 70-80% of the refined market and at least half of the battery market.
To address this, the United States and the European Union have invested in the Lobito Corridor—a mine-to-port railway in sub-Saharan Africa. This project includes constructing 350 miles of new railway in Zambia and upgrading 800 miles of existing rail from the DRC to Angola. The Lobito Corridor aims to enhance Western access to cobalt and reduce dependency on Chinese supply chains. However, the corridor alone cannot resolve these issues.
Challenges in the mining-to-refining journey
A significant portion of cobalt mined in the DRC is shipped to China for refining, making the journey between these hubs lengthy and costly. The most common route involves a month-long trip from Kolwezi in the DRC to Durban, South Africa, with potential delays due to various disruptions. Alternative routes to ports in Namibia, Mozambique, and Tanzania face similar issues.
The Lobito Corridor offers a more efficient route, cutting travel time to eight days and reducing carbon emissions compared to truck transport. However, the corridor needs substantial investment to become competitive with traditional routes. The railway, built by Belgium and Portugal between 1902 and 1931, fell into disrepair due to the Angolan civil war. A US$2 billion restoration funded by China in 2006-2014 revitalized the tracks. In 2023, a consortium, Lobito Atlantic Railway (LAR), secured a 30-year concession to refurbish the railway and invest in infrastructure.
Limitations and opportunities
While the Lobito Corridor presents advantages, it cannot alone address the issues of cobalt access and reliance on Chinese control. Chinese firms dominate the DRC’s mining sector, and other rail projects, such as China’s planned US$1 billion upgrade of the Tazara Railway, could potentially overshadow the Lobito Corridor.
Moreover, the Lobito Corridor does not directly alter the dynamics of cobalt control. Chinese firms are set to benefit from its efficiency, and Chinese state-owned enterprises have stakes in the project.
The case for local refining
The current model of exporting raw materials for processing abroad is outdated and exploitative. Sub-Saharan Africa, despite being rich in minerals, misses out on the economic benefits of local refining. Developing local refining capacity in the DRC and Zambia could significantly boost profits, reduce emissions, and support regional integration. Investments in local processing align with the goals of diversifying supply chains and reducing Chinese influence.
Challenges in local refining
Building refining plants in sub-Saharan Africa presents challenges, including high costs, infrastructure needs, and political instability. Despite these obstacles, progress is being made. For example, Luxembourg’s Eurasian Resources Group is developing a US$800 million hydrometallurgical plant in the DRC, and Congolese company Buenassa is planning a US$350 million smelter.
Conclusion
The growing interest from countries beyond China in sub-Saharan critical minerals comes at a pivotal time. While the Lobito Corridor is a step forward, securing a reliable supply of critical minerals and reducing dependence on China will also require investment in local refining. Such efforts could foster a more balanced and sustainable partnership between the West and sub-Saharan Africa.
