Electric battery manufacturing – could this be Africa’s next big thing?

By Conrad Onyango, bird

A proximity to raw materials and the availability of renewable power was always likely to be the winning formula for an electric economy if only the funding and political will were in place. A pilot in the Democratic Republic of Congo (DRC) suggests it is. Could this signal an exciting new source of income and beneficiation – and maybe kickstart an entire new economy – for Africa?

The private sector, politicians and regional lenders have come behind Africa’s first regional electric battery manufacturing initiative, taking shape in the cobalt-rich DRC.

With business and political commitments already signed, alongside the creation of a Battery Council to pilot government policy, the project to develop a regional value chain around the electric battery industry is expected to start over the coming two years.

The project has the backing of the Government of the DRC, the United Nations Economic Commission for Africa (UNECA), the African Export-Import Bank (Afreximbank), the African Finance Corporation (AFC) and the African Development Corporation (ADC), among other strategic investors.

“The machine is now launched, it is necessary to start right after this forum,” the DRC’s head of state and chairman of the African Union Commission, Félix-Antoine Tshisekedi, affirmed during a week-long business forum last week.

A Bloomberg New Energy Finance (BloombergNEF) study estimates it would cost $39 million to build a 10,000 metric-tonne cathode precursor plant in the DRC – the cost being three times cheaper than putting up a similar plant in the US.

Availability of minerals for the plant and a rising demand driven by a transition to electric mobility makes the DRC a very competitive market. By comparison, China and Poland would need to invest $112 million and $65 million respectively for a similar plant, according to the study, The Cost of Producing Battery Precursors in the DRC.

“Africa has a wealth of critical battery raw materials and is in a position to use these to attract more value-add in downstream processing and manufacturing,” said James Frith, head of energy storage at BloombergNEF.

While the DRC is the world’s biggest producer of cobalt and accounts for about 70% of global reserves, the country captures only 3% of the battery and electric vehicle value chain.

However, the newly created Battery Council is expected to ramp up activities in electric battery production by bringing together leaders in government and green energy sectors and setting up a special financial vehicle that will mobilise private investments to develop and promote a sustainable battery value chain in the region.

Private sector players rallying behind the initiative include Australia-based mineral exploration firm, AVZ Minerals Ltd, focused on developing the Manono lithium and tin project in the south of DRC, and Bosch, the world’s biggest automotive supplier.

“The DRC and Africa are strategically positioned to play a pivotal role in the global transition to clean energy and decarbonisation and the Manono project will greatly assist to improve the fortunes of the Congolese people, which AVZ Minerals is very supportive (of),” said AVZ’s managing director, Nigel Ferguson.

The BloombergNEF report values the global electric vehicles market at $7 trillion up to 2030, with the opportunity value seen rising to $46 trillion by 2050.

Executive secretary of the UNECA, Vera Songwe said the DRC has a big opportunity to tap into the world’s largest single market – the African Continental Free Trade Area – to receive additional upstream mineral inputs for lithium-ion batteries from other resource-rich countries on the continent.

The plant, she said, could for instance source manganese from South Africa and Madagascar, copper from Zambia, graphite from Mozambique and Tanzania, phosphate from Morocco, and lithium from Zimbabwe.

Zambia has already affirmed its commitment to the initiative.

“Zambia is willing to cooperate with the DRC and other African countries to achieve this dream,” said the president of Zambia, Hakainde Hichilema, during the business forum.