The world’s growing appetite for electric cars will drive growth in Africa

The world has warmed by approximately 0.85oC for about 13 decades now, but each of the last three decades has been warmer than any preceding decade since 1850. Over the last five decades, human activities – particularly the burning of fossil fuels – have released carbon dioxide and other greenhouse gases enough to trap additional heat in the lower atmosphere and affect the global climate. The result of this global warming, according to the World Health Organisation (WHO) is that between 2030 and 2050, there will be approximately 250,000 additional deaths per year, from malnutrition, malaria, diarrhoea and heat stress. There is also the direct damage cost of $2-4 billion on health every year by 2030. To address these challenges several organisations and countries around the world are promoting low carbon economies through several means, including the sustainable use of renewable energy sources.

With the transport sector the fastest growing contributor to climate emissions, contributing about 23 percent of global carbon dioxide emissions in 2010, the world is fast embracing cleaner energy solutions driving the growth in global sales of electric vehicles.  

According to a report by industry research firm Bloomberg New Energy Finance Limited (NEF), by 2040, 55 percent of all new car sales and 33 percent of the global fleet will be electric. The report further noted that electrified buses and cars will displace a combined 7.3 million barrels per day of transportation fuel in 2040.

Billions for battery metals

Hence, billions in investments are pouring in to drive research and development of new models of electric vehicles, the batteries that power them and superchargers that ensure the batteries are recharged as quickly as possible. Governments in different countries around the world are tightening emission standards and are supporting the adoption of electric vehicles by offering financial incentive schemes for the purchase of these vehicles. All these have benefited the electric vehicle market, which is projected to reach $362.7 billion by 2025.

While Africa, where more than half of the population did not have access to electricity in 2016, may not be ready for the electric car revolution, the continent can still gain from the revolution. Africa is blessed with essential metals for making rechargeable batteries used in electric vehicles. From Lithium to Cobalt, Copper, Manganese and Nickel, Africa is rich in battery metals and if well harnessed, these free gifts of nature have the potential to further drive growth on the continent.

Here are some battery metals found in Africa

Zimbabwe, currently one of the top 10 global Lithium producers, is believed to have the potential to supply 20 percent of the world’s Lithium. According to a 2014 report, Zimbabwe produces the fifth most lithium in the world, at 1,000 metric tons.

As at 2012, the Democratic Republic of Congo (DRC) was known to contain at least half of the known cobalt reserves around the world, with a copper belt that yields around 55 percent of the global mining supply of cobalt.

With mine production of 5.3 million metric tonnes, South Africa is the world’s number one producer of manganese, a metal that is also produced abundantly in Gabon and Ghana, two other African countries that make up the top 10 global producers of the metal. South Africa is also a top-four global producer of Vanadium, which analysts say could be used in future for industrial-scale batteries. As calls to reduce global warming by reducing burning of fossil fuels continue, demand for battery metals will continue to rise. As a result, exploration budget for Africa will keep growing as investors look to the continent for battery metals.

Lithium price per metric ton Source: Metalary

Getting More from Minerals

Historically, Africa has struggled to feel the impact of its natural resources, with many attributing this to the continent’s failure to add value to its resources before export. While beneficiation can drive economic growth, it is difficult to add value in an environment that lacks basic infrastructural needs of the industry. Rather, Africa should focus on developing backward linkage industries for its mining sector.

As investors look to Africa for its battery metals, governments across Africa need to improve the regulatory environment and enact tax policies that encourage trade and investment. These coupled with a deliberate attempt to grow a mining inputs industry — which is easier to achieve than beneficiation — will help Africa get more from its minerals. But it doesn’t have to end this way, with a long-term assessment of the potential of its mining industry and how it can drive economic growth, Africa can continue a steady rise, from supporting mines to actually adding value to products from mines. In the short to medium term, Africa can also encourage its budding tech industry to help develop the mining sector through technology.