How Africa can spark bargaining power locked in critical minerals

The global abundance of critical minerals gives Africa a strong voice in determining how these minerals can benefit African nations facing poverty and effects of climate change. [iStockphoto]

In a few months, the world will introduce the third generation of Nationally Determined Contributions (NDC 3.0). This update follows the evaluation of NDC 2.0, which fell short of the Paris Agreement targets for limiting global warming.

To reduce emissions, countries had submitted climate targets indicating their commitment to limiting global warming to well below 2°C and preferably to 1.5°C above pre-industrial levels.

The NDC 2.0 succeeded in increasing global ambition, enhancing the focus on adaptation, and broadening participation by parties. However, it was assessed as insufficient in closing the gap necessary to meet Paris Agreement targets.

Parties are urged to set more ambitious targets and transition from fossil fuels to clean energy. Additionally, this requires concrete actions to address the shortfall in financial and technical support, particularly for developing countries.

The latter are far richer in critical minerals needed for transition but at the same time point in infrastructure, which should facilitate the process of the critical minerals value chain, i.e., from exploration to final processing.

The lack of technical and financial capacity instigates the export of raw critical minerals to developed countries, which return the final products. The increasing global demand for critical minerals is driven by the clean energy transition.

Critical mineral needs are taking unprecedented heights as the world transitions from fossil fuels to clean energy.

International Energy Agency (IEA) indicates that due to the global sharp demand of critical minerals, countries like Canada and Australia led the way with over 40 per cent growth year-on-year, notably in hard-rock lithium plays in 2023.

This is in addition to intensive exploration activities in expansion in Africa and other countries such as Brazil.

If all investors’ eyes are on Africa, it’s not by coincidence; it’s because of its vast critical minerals reserves globally which stand at 30 per cent of the world’s mineral reserves as reported by the Mo Ibrahim Foundation report on critical minerals entitled: “Africa’s critical minerals; Africa at the heart of a low-carbon future.”

Africa is home to the world’s critical mineral resources, including 85 per cent of manganese, 80 per cent of platinum and chromium, 47 per cent of cobalt, and 21 per cent of graphite.

Key players include countries such as the Democratic Republic of Congo, South Africa and Zimbabwe. The DRC alone holds 74 per cent of the world’s cobalt supply, while South Africa controls 90 per cent of global platinum group metal reserves. 

This global abundance of critical minerals gives Africa a strong voice in determining how these minerals can benefit African nations facing poverty and effects of climate change.

Although countries such as China, US, India, and Australia are actively investing in critical minerals in Africa, African countries must develop ambitious strategies and take leadership roles to effectively negotiate and position the continent in critical mineral ventures.

This was hinted at in the 24th paragraph of the CCDA -XII outcomes document where African countries were called to Africa leverage value addition to their natural resources including its critical minerals towards green industrialisation.

However, for this to be possible, strong political will and commitment to the continent’s leadership are key. For example, during discussions at CCDA XII in Abidjan, Ivory Coast, it was highlighted that African collaboration, political instability and governance hinder the sustainable way of managing these golden resources.

This is subsequent to recommendations from previous critical minerals conference convened by PACJA and partners in Johannesburg, South Africa, indicated that Africa’s governments need to enhance governance and transparency and prioritise investment in the value-addition and beneficiation industries to retain more of the economic benefits within the continent.

The policy framework in Africa should focus on maximising the continent’s benefits, moving from mere policies to concrete actions.

Strengthening regional and continental economic and development initiatives such as the African Continental Free Trade Area (AfCFTA) and others can help establish a unified voice and effective policies.