Africa's key minerals role in the energy transition

A lot of conversations around the energy transition are currently taking place across Europe and Africa. While the common goal of net zero unites these two regions, the individual needs of each are different. Mainland Europe is nearly fully industrialised. Its focus has shifted from mining locally to obtaining materials from other regions to manufacture products like EV battery anodes and cathodes, while Africa plays a critical role in supporting the shift to carbon neutrality, with the region rich in mineral and metal reserves.

What’s driving minerals demand?

Demand for refined minerals is being fed by the development of dozens of gigafactories. Around 60, worth $2bn each, are being built across Europe, the US, Australia, and Canada. These gigafactories bring both risk and opportunity. While they make the green transition a more realistic aim, they are also set to more than triple cobalt and lithium demand by 2030.

With gigafactories working at a full output using high-grade minerals, the world stands a chance of undergoing an energy transition. If their demand cannot be satisfied, the green transition vision post-COP 26 may simply become a pipe dream.

To meet the surge, the supply chain will have to evolve, and Africa has the raw materials to place itself at the center of this evolution. Given the complex and varied circumstances across the African continent, how can battery-grade material be mined sustainably at the pace required to help supply a green industrial revolution?

Finding a stable supply of battery material

According to the European Economic and Social Committee’s Strategic Action Plan on Batteries, the demand for EV batteries is expected to surpass 200 GWh per year by 2023 and reach around 400 GWh by 2028.

For Europe to meet its future demand for energy transition materials it needs greater security of supply from sources it either owns or can manage through long-term agreements. It also needs products made with low-carbon materials from low-impact mines to meet environmental, social, and governance (ESG) expectations.

A 2020 report by the European Commission’s Joint Research Centre offers a forensic analysis of the risks and opportunities within the battery supply chain. It highlights the Democratic Republic of the Congo (DRC), Mozambique, and South Africa as sources of the minerals and metals currently in the European battery supply chain, as well as the risks associated with each country, including the environmental challenges. Looking at risks to the supply chain, sourcing is only half the problem.

A monopoly on minerals?

Mineral sourcing covers the globe, with most copper coming from Chile, nickel from Indonesia, cobalt from the DRC, and lithium from Australia. Where these minerals are refined, however, is not so geographically diverse. China currently processes the majority of each of these minerals – and by quite some way.

As an example, despite more than 70% of cobalt coming from mines in the DRC, most of the metal is refined in China. The same can be said when looking at the refinement of copper, nickel, and lithium. This balance won’t shift overnight. But with proven reserves and vast, unexplored regions, Africa has the potential to supply battery-grade materials to Europe, while also providing economic growth opportunities for local communities. There are still things miners need to do to capitalise on this demand.

The challenges facing African miners

Miners across Africa will need to meet the requirements of international investors and incorporate low-energy mining and refining strategies that meet global safety and productivity standards.

There are several vulnerabilities in the critical minerals supply chain that may hinder adequate supply, leading to greater price volatility if supply proves fragile. These risks include a high geographical concentration of production and processing led by non-Western governments, long project development lead times if traditional processes are followed, declining resource quality, growing scrutiny of ESG issues, and exposure to climate risk in high water stress areas.

Considering all these challenges, the one at the forefront is the energy used to power a mine.

How fast can Africa catch up?

African-based miners will need to start with emissions reduction across the mining value chain if they’re to meet the needs of the European batteries market sustainably. This includes reducing the energy intensity of a mine site.

However, creating capital to reinvest in renewable energy infrastructure will take forethought and planning. The reality is that margins are tight, and miners across Africa will need to create new capital if they’re to invest confidently in low-emission solutions like wind farms or solar power.

One solution is to go further down the beneficiation stream. Currently, material passes hands several times before it gets to the component level. Compressing supply chains presents opportunities for African miners. Other than lithium, most resources travel well and can be purified locally into high-value materials and shipped to the European batteries market.

African mines, developed in the interest of serving the European market, can relieve the strain currently felt by the continent’s reliance on Chinese refined minerals. This could see Africa become not only a producer, but a large-scale, high-quality refiner, helping to satisfy Europe’s burgeoning demand for minerals used in battery electrodes.

For example, South Africa has around 70% of the world’s manganese. With the right investment, the country could become a leading electrolytic manganese producer. This is something that’s gaining traction, with three advanced studies for electrolytic/high-purity manganese facilities currently being undertaken. The same applies to electrolytic cobalt and nickel sulphate.

African-focused investment has been slow over the last five years, but it’s progressing quickly as miners look to supply a more beneficial product that feeds directly into the batteries manufacturing process.

A higher-value product creates a better margin for the local producer to invest in renewables. This is something we are seeing happen in pockets, with miners adding solar facilities to
generate green electricity.

Complex mining solutions need a diversified partner

Finding the right partner with end-to-end process experience is important to produce battery-grade material for European manufacturers. Worley has completed more than 200 projects involving graphite, nickel, manganese, vanadium, lithium, and cobalt mining.

We’re able to see this through the intermediate processing steps by helping our customers refine and convert raw materials into active material. This includes graphite anode facilities, from mining through to anode precursor, and we’ve completed work for several cathode precursor producers of Li-ion NCM material and electrolyte.

This type of experience has allowed us to deliver both anode and cathode precursor projects with some directly integrated with mining and mineral processing.

A brighter future for Europe and Africa

As Europe pushes forward with its decarbonisation plans, its relationship with Africa has never been more important as it races to build capacity and secure a sustainable supply chain.

The supply chain of 2030 will not be the same as that of 2021. Changes must and will be implemented to make sure that mineral-hungry gigafactories are fed. Whether the masses of minerals needed will be met by supply remains to be seen, but Africa is perfectly placed to meet demand – with the help of an enabling international community.

If Europe can encourage at-source refining, then its fears of oversupply issues may well be quelled.

Meeting these challenges to position for growth will require a step-change in how resources are developed and operated. It will also require coordination and cooperation between governments at all levels, investors, operators, equipment suppliers, service providers, end-users, and communities to accelerate the development of critical minerals while at the same time managing the needs of all stakeholders.

Darryn Quayle is Vice President Energy Transition and Resources at Worley. To read details of Worley's recent acquisition of Minera Mining Technologies, click here.