Lithium-Cobalt value chain analysis for mineral based industrialization in Africa
The global energy landscape is undergoing its biggest transition in decades. The move towards net-zero, with the world transitioning from fossil fuels to cleaner and sustainable sources of energy. Even though Africa contributes only 4% of greenhouse gas emissions in the global mix currently, the continent also bears the brunt of climate change impacts. As Africa prepares to host the COP 27 this year, all eyes are on the continent, expecting to see the efforts that are being put in place towards the energy transition. Whiles Africa’s development trajectory is quite unique and different from the rest of the world, the continent needs to be conscious of its energy transition journey. Africa has several ambitions which require high energy demand, considering its quest to bridge the energy access gap, industrialize, and transform its economies all while transitioning from fossil fuels.
Among other things, the solution to reducing fossil fuel emissions include the production of Lithium-ion batteries (LIB), which use several mineral, among them lithium and cobalt (Li-Co), manganese, nickel,
aluminum, graphite, iron as well as phosphate. Fortunately, many African countries are endowed with these minerals, which allows them to leverage on this opportunity in their energy transition efforts. In addition to export earnings from these minerals, African countries could derive greater economic value from their mineral resources through linkage development (backward, forward and side-stream). Besides the resource deposits, other critical factors include the international trade environment and its impact on a country’s ability to successfully leverage its competitive advantage.
This paper therefore assesses the current and future status of Lithium-Cobalt reserves, identify opportunities for value addition in Lithium-Cobalt value chains in Africa and to also propose policy options for promoting value addition, efficiency, and equity of Li-co value chains in Africa as the continent leverages on these minerals for its energy transition efforts.