Forecasts suggest that the global economy is facing a ‘commodity gap’ in the near future as the demand for battery minerals could outstrip supply. Could Africa fill that gap?
There is certainly good reason to see Africa making a valuable contribution to future supplies of mined commodities from lithium, cobalt, nickel and graphite to manganese, iron, copper, chrome, uranium and aluminum.
While there are considerable resources of these minerals available in Africa and even currently being mined, there remain challenges which prevent their economic extraction. Gold mining has thrived in Africa because minimal infrastructure outside of the mine itself is needed to process and transport ore. By contrast, many of the in-demand commodities are bulk minerals that need extensive road, rail and harbour infrastructure.
Planning and developing such facilities requires more than capital. They rely on long-term government policies being implemented by well-resourced state bodies in collaboration with the private sector and international funding agencies. They also call for close working relationships between neighbouring countries to allow railways, powerlines and goods to pass over borders efficiently and at a low cost.
The African Continental Free Trade Agreement (AfCFTA), effective January 1, 2021, should address some of these concerns. Over time, the AfCFTA will eliminate import tariffs on 97% of goods traded on the continent, as well as address non-tariff barriers.
There are many opportunities for exploration and mining of battery minerals in West Africa. In Ghana, a significant lithium deposit is currently being investigated – the only one so far in West Africa. Interest in this region will grow if there are further positive developments linked to this project.
The impact of bulk mineral projects extends not just to physical infrastructure, but to a wider natural and human environment. For these projects to be sustainable in terms of environmental, social and governance considerations, developers need to navigate complex terrain related to regulatory compliance and social acceptance, which will require a high level of scientific and engineering skill to identify and mitigate the related risks as well as certainty in the expectations of the host country.
SRK is focusing on further improvement in Africa, particularly in the Democratic Republic of Congo and Zambia.
