The abundance of strategic metals, critical minerals, and rare earth elements in Africa offers the continent a great opportunity to spur industrial development and drive the energy transition.
As demand for battery minerals and components grows in line with the expansion of the electric vehicle market around the world, a new scramble for Africa’s mineral resources is opening numerous business opportunities across the continent. Africa’s abundance of metals, critical minerals, and rare earth elements has the potential to spur socioeconomic development while leading Africa towards an inclusive energy transition.
Day 2 of African Energy Week 2022, held in Cape Town on 19 October, featured a strong lineup of speakers who discussed the future of Africa’s mineral riches and mining industries, and what role they will play in the continent’s energy transition. Moderated by C. Derek Campbell, Executive Chairman for the African Metals Group, the panel discussion featured H.E. Hon. Martin Gama Abucha, Minister of Mining for South Sudan; Lars Shernikau, an energy economist, commodity trader, and ntrepeneur; Dr. Aleia Bucci, COO of Lunasonde; and Eng. Saad Al Khuzayim, Department Manager of Business Development and Planning at Saudi Arabia’s Ministry of Energy.
“Africa is known to be the least developed continent in the world due to its chronic poverty in energy. To develop, all African countries will have to collectively look into their natural resources and devise sustainable ways of development, generation, and distribution of energy within the continent,” stated H.E. Hon. Martin Gama Abucha, Minister of Mining for South Sudan.
Mineral beneficiation has become one of the main drivers in advancing Africa’s mining sector, with the continent’s immense natural resource endowment presenting an incomparable opportunity for the development of large and small mining industries, thus strengthening overall economic competitiveness.
“We are currently looking at developing a technology to use satellites to offer a more sustainable and scalable way to do resources exploration,” stated Dr. Aleia Bucci, COO for subsurface imaging startup Lunasonde, adding, “What’s fantastic about using satellites for exploration is that they are more sustainable and cost effective. Depending on the minerals we’re looking at, we only need to make a few passes to collect sufficient data.”
For Africa to build a resilient, diversified, and competitive economy that benefits all citizens, major industry players will need to focus on improving the management of natural resources, with a specific focus being placed on transparency, knowledge-sharing, and sound administration as a prerequisite for beneficial resource governance.
“We’ve seen how renewables are developing and we all agree on how we want to move towards the future, what role Africa might play, and how we can secure the whole value chain to make sure the supply of energy is sustainable”, stated Eng. Saad Al Khuzayim, Department Manager of Business Development and Planning for the Ministry of Energy of Saudi Arabia. “We need to collaborate with other continents and countries and invest more in energy to make sure the value chain is sustainable, accessible, cost-effective, and available.”
With regards to providing supply chain security to the West, it was noted during the panel discussion that the minerals and mining companies should review existing strategies to strengthen domestic operations and thereby mitigate the risk of external disruption.
“Critical minerals play a huge part in the transition to wherever we’re currently aiming to go,” stated Lars Shernikau, an energy economist, commodity trader, and entrepreneur, adding that, “If Africa is serious about minerals, Africa had better get its energy under control. You cannot process minerals without an abundance of energy. And the first step is knowing exactly where the resources are.”
Producing and consuming locally will offer Africa the opportunity to develop supply chains that offer small to medium-sized enterprises opportunities to leverage their strengths to feed into larger chain networks that create value through production, processing, and distribution, thereby ensuring wealth creation within the continent.
“Technology is being invested in and more reduction is happening. We have to look at three main pillars: it’s not only decarbonization, and not only renewables, and not only pumping oil and gas, but it’s also the whole energy value chain,” added Eng. Al Khuzayim.
Finally, the panelists discussed how governments, local companies, and host communities might empower themselves by bypassing middlemen when engaging with local and international industrial consumers.
“The funding of energy projects has always been difficult, leading to delays and the suspension of work when funds dry up. A proposal to build, operate, and transfer (BOT) needs to be put on the table for consideration. It is envisaged that a seasoned contractor that is confident of the quality of their work would most probably accept the BOT offer,” concluded H.E. Hon. Minister Abucha.