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How China is Outpacing the West in Africa’s Lithium Boom

China is investing heavily in mining projects across the continent, while the West is lagging behind

by Motoni Olodun

Africa is home to some of the world’s largest reserves of critical minerals, such as lithium, cobalt and rare earth, essential for the transition to clean energy. These minerals are in high demand for making batteries for electric vehicles and electronics, which are expected to grow exponentially in the coming years. According to the International Energy Agency, global demand for lithium could increase by more than 40 times by 2040.

However, the West is lagging behind China in securing access to these strategic African resources. China, which already dominates the refining and processing of these minerals, is aggressively investing in mining projects across the continent, especially in lithium. China’s imports of minerals and energy from Africa were worth twice as much as those of the US and the EU combined in 2022.

One example of China’s lithium rush is in Zimbabwe, where a Chinese firm, Zhejiang Huayou Cobalt, opened Africa’s biggest lithium mine this year. The mine, Arcadia, produces lithium ore shipped to China for refining. Huayou bought Arcadia from an Australian company for $422m in 2022 and developed it quickly. The company also has a processing centre at the mine, which could be expanded.

Zimbabwe is expected to account for most of the increase in Africa’s lithium production, from 0.1% of the global share in 2019 to 10.6% in 2025. Over 90% of Africa’s lithium supply this decade will come from entities partly owned by Chinese firms.

The West is not completely absent from Africa’s lithium scene. Some Western companies are exploring lithium in countries such as Ethiopia, Ghana, Namibia and Rwanda. However, most of these projects are not yet in production, and some may be sold to Chinese buyers. Western investors are also wary of the political and environmental risks of operating in some African countries and the possibility of oversupply and price volatility.

Moreover, the US’s domestic policies are not conducive to investing in African mines. For instance, some tax incentives in the Inflation Reduction Act, Joe Biden’s massive clean-energy bill, are only applicable if the minerals come from the US or its free-trade partners. However, the US has no such agreements with sub-Saharan African countries.

Some analysts argue that the US and its allies should do more to support African countries in developing their mineral resources and diversify their sources of supply. They also suggest that the West should help Africa add more value to its minerals before exporting them and foster ethical and sustainable mining practices.

However, China is not oblivious to Africa’s aspirations. China also builds battery factories and refineries in some African countries, such as Morocco. China is also involved in most cobalt processing in Congo, another critical battery mineral. China’s strategy is to secure as much raw material as possible while expanding its presence along the value chain.

China’s dominance of critical mineral mining in Africa may not be ideal for the continent. Some critics say that China is exploiting Africa’s resources and that its mining activities may lead to under-valuation, tax avoidance and human-rights abuses. In Zimbabwe, for example, some local residents are unhappy with the Arcadia mine and claim that the Chinese are involved in the illicit lithium trade.

However, Africa also has an opportunity to leverage its mineral wealth for its own development. Some African countries are trying to attract more investment and technology transfer from other partners, such as the EU and Japan. Some are also investing in renewable energy and electric mobility to reduce their dependence on fossil fuels and to create more jobs. Africa can become a key player in the global green economy if it can manage its resources wisely and equitably.

Source: The Economist


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