MMC Linkages

Demand for critical minerals—bauxite, cobalt, copper, lithium, nickel, and other minerals that underpin solar, wind, geothermal, and other forms of renewable energy and electric vehicles—is already booming and is projected to continue to grow at a rapid pace.

Global production for many critical minerals will need to increase by a factor of 3–42 to meet the renewable energy obligations established by the Paris Agreement, according to the International Energy Agency (IEA 2021). Demand for lithium, graphite, cobalt, and nickel are set to grow the most rapidly, largely because of increased demand for electric vehicles and battery storage. Demand for other industrial metals, including rare earths, molybdenum, copper, and silicon, is also set to rise.

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Africa’s mineral-rich developing economies could benefit greatly from this increase in demand. Many African economies have vast critical mineral reserves, and their nascent industrial sectors imply vast export potential, even as/if these economies industrialize. To do so, however, they need to improve their infrastructure, investment climate, and governance and learn to navigate an increasingly complicated geopolitical environment.

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These countries could increase the benefits they reap from these minerals by building downstream capacity in processing—the steps that turn mined ore (bauxite, iron ore) into refined intermediate goods (aluminum, steel). Processed materials command significant price premia over unrefined ore. Domestically producing refined products would also reduce input costs for infrastructural and industrial development, provide good manufacturing jobs, and stimulate service sector development in host communities. 

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Developing Africa’s capacity would also serve Western geopolitical ends. Read More

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