Africa's Rising Role in the

Global Energy Transition and

Critical Minerals Supply Chain
An FT Live report

africa.live.ft.com

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Table of contents

1 4
The role of critical Can Africa benefit
minerals in the global more from its own
energy transition natural wealth?

2 5
Harnessing natural Looking ahead:
resources to strengthen Lessons from the oil
Africa’s position in the and gas boom, and gold
global supply chain

3
The shift in
inbound investment
1 The role of critical minerals in the global energy transition
We need to recognise that investors are not properly valuing this sector
and in particular those companies developing the most socially
responsible approaches

Adam Matthews, chief responsible investment officer at the Church of England

Pensions Board

Many parts of the world are rapidly shifting towards renewable energy and
electric vehicles, driving unprecedented demand for critical minerals as well
as significant investment from businesses and governments.

The energy transition has provided an opportunity for mining executives to

change a public narrative that the sector is polluting, destructive and part of
the problem. But if the sector is to be viewed as part of the solution, actions
will speak louder than words
BHP’s attempted takeover attempt of Anglo American may have failed, but
it has reinvigorated the mining industry, raising share prices and drawing
attention to the role it plays in decarbonising the global economy. This
boost may also be channelled into financial support for the production of
metals and minerals that could help build renewable power plants, power
lines and electric vehicles.

Since 2010, the average amount of mineral resources needed for a new unit
of power generation capacity has increased by 50% as energy shifts to
renewables, according to the International Energy Agency (IEA).

Lithium, nickel, cobalt, manganese and graphite are crucial to battery

performance, while rare earth elements are used in wind turbines and
electric vehicle motors. Electricity networks need a huge amount of
aluminium and copper.

Governments must balance the need to reduce emissions with the need to
ensure energy systems remain resilient and secure, all against a backdrop of
price volatility, shaky supply chains, and shifting geopolitical alliances.
 Harnessing natural resources to strengthen
2 Africa’s position in the global supply chain
Africa is facing the same challenges, exacerbated by low levels of
industrialisation and electrification along with already high sovereign debt.

The African continent holds vast reserves of minerals such as copper,

lithium, nickel, cobalt, manganese, graphite and rare earth elements.
Historically, however, African nations have not reaped the gains achieved
by mainly foreign companies and governments that have profited from its
natural resources. 

African nations are working to develop a natural resources sector that can
produce economic growth, job creation, and industrial development. However,
hard questions face those leading the charge: To what extent can they
structure partnerships with wealthier nations and companies, development
banks and private financiers, and ensure their citizens share the rewards?
How can they monetise their role in the global supply chain? Is there enough
transparency, on the part of both investors and political leaders?

Part of the answer could lie in a “super-region”, connecting Africa, the

Middle East, central Asia and the Indian subcontinent.

3 The shift in inbound investment

With its easy access to finance from the Gulf, this new agglomeration could location for minerals processing and corporate headquarters. That said, the
US appears to have been brokering Gulf investment in riskier markets such as
become a central hub for the mining industry. By the start of 2024, Saudi
Arabia had signed deals to explore mining projects with Egypt, Russia, the Democratic Republic of Congo in order to keep China out.

Morocco and the DRC. 

This marks a shift from recent decades, which saw China become one of the
most significant investors thanks to its provision of financing and
infrastructure such as roads. Western governments, which had previously
been dominant, are once again seeing strategic value in developing and
maintaining secure supplies of critical metals and minerals. 

Now, Gulf nations are directing funds from fossil fuels to secure the copper,
lithium, nickel, iron ore and other minerals they need for electrification and
innovative technologies. The UAE’s International Resources Holding is in the
running to buy a major Zambian copper mine, while Saudi Arabia anticipates
mining will contribute $75bn to its economy by 2035, up from $17bn. Oman
has started construction on a green steel plant that will use iron ore from
Cameroon, while the Qatar Investment Authority has become Glencore’s
second-biggest shareholder.

Wary of geopolitical tensions between the US and China, African leaders and
international mining companies may see the Middle East as a more neutral
4 Can Africa benefit more from its own natural wealth? according to the South African Institute of International Affairs (SAIIA). As
You will simply not be able to build a new-energy system and reduce the world’s of May 2023, the Africa Development Forum published research showing
CO₂ emissions without getting sufficient access to a number of minerals

that the DRC, Nigeria, Namibia and other African nations had restricted or
banned exports of certain critical minerals as a means to retain some
Jakob Stausholm, CEO, Rio Tinto control over processing, protect domestic jobs, and create the conditions
for regional clean energy. 

In 2023, global demand for lithium rose by 30%, and by 8%-15% for nickel, In the meantime, Sub-Saharan Africa - the source of so many critical
cobalt, graphite and rare earth elements, according to the IEA. The agency minerals - is home to nearly 600 million people who lack access to
estimates that the minerals central to the energy transition are currently electricity. Policymakers can address this in partnership with business by
worth a combined USD 325bn, and will reach some USD 770bn by 2040 for leveraging new technologies and innovative financing models. African
copper, lithium, nickel, cobalt, graphite and rare earth elements. 
nations also face the challenge of doing more to retain control of their
Investment in critical mining grew by 10% in 2023, while venture capital resources, translating them into jobs, economic growth, better
spending increased by 30%. During the first six months of 2023, China infrastructure, and fairer conditions for citizens. ​​

spent USD 10bn on mining, focusing on battery metals such as lithium, The World Bank Group is committed to connecting 250 million people in
nickel and cobalt.
the African region with electricity by 2030, and expects this to require USD
But most of these resources will go towards efforts by developed markets 30bn of public investment via low- and no-interest loans. According to the
to green their own energy ecosystems. 
African Development Bank (AfDB), homegrown initiatives such as the
African Continental Free Trade Area (AfCFTA), blended finance, public-
The continent holds 30% of the world's mineral reserves including cobalt private partnerships, and diaspora bonds can boost development finance in
in the DRC, manganese in South Africa and lithium in Zimbabwe, line with that objective.

5 Looking ahead: Lessons from the oil and gas boom, and gold
During the boom years of 2001–2014, extractive industries comprised
close to two-thirds of African exports, with oil and gas accounting for
results such as pollution. The projects that benefited local populations
were driven by responsible government and private initiatives. 

nearly 50% of these, according to a report co-authored by Agence To address environmental concerns, infrastructure gaps, economic
Française de Développement (AFD) and the World Bank. 
fairness and longer-term sustainable development, clear regulatory
Rising exports of natural resources contributed significantly to frameworks are needed at the national and regional levels.

government finances, providing much-needed funds for building human

and physical capital - until commodity prices plummeted in 2014. 

Apart from potential over-reliance on a single source of revenue, some

African countries have in the past suffered from the so-called “resource
curse”, in which natural wealth fails to convert into widespread benefits
across services such as health and education. Despite contributing
significantly to export revenue and GDP, mining is not necessarily the
best source of job creation. Meanwhile, negative perceptions of the
impact of mining on the environment and human health present another
ongoing challenge. 

A study by the AFD and World Bank on the market, fiscal, and
environmental impacts of gold mining in Ghana, Mali, and Tanzania did
not find evidence of economic decline, although there were negative
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