By William Emmanuel Ukpoju
Africa is at the heart of the global energy transition. With an estimated 30% of the world’s critical minerals—including 70% of global cobalt reserves, significant lithium deposits, and large manganese resources—the continent has become indispensable to the clean energy revolution. These minerals are vital for the production of lithium-ion batteries, electric vehicles (EVs), and renewable energy storage systems, all of which are expected to play a central role in global decarbonization efforts.
However, Africa currently captures only about 10% of the total value of these resources, largely because it primarily exports raw materials instead of processing them into refined products or manufactured goods. According to the African Development Bank (AfDB), Africa’s mining sector contributes approximately 10% to GDP, but the value addition is minimal. For instance, the Democratic Republic of the Congo (DRC), which supplies nearly 70% of the world’s cobalt, earns only a fraction of the final value of products such as EV batteries.
Meanwhile, the global demand for these critical minerals is skyrocketing. The International Energy Agency (IEA) predicts that by 2040, lithium demand will surge more than 40 times its 2020 level, while demand for cobalt and nickel will rise at least 20 times. The price of lithium, for example, increased nearly tenfold between 2020 and 2022, reaching over $80,000 per metric ton at its peak. Yet, African nations, despite possessing the raw materials, remain at the lower end of the supply chain. This raises an urgent question: Will Africa seize the opportunity to develop its own processing and manufacturing industries, or will it continue to serve as a mere resource supplier for wealthier industrialized nations?
The African Continental Free Trade Area (AfCFTA), the largest free trade zone in the world by participating countries, offers a potential pathway for Africa to move up the value chain. By fostering regional cooperation, attracting investment in mineral processing, and creating a unified trade strategy, AfCFTA could transform Africa’s economic landscape. However, without strong governance, infrastructure investments, and industrial policy alignment, Africa risks repeating historical patterns of resource exploitation without benefiting from the true economic potential of its mineral wealth.
This article explores how Africa can strategically position itself within the global clean energy transition by harnessing its critical minerals for local beneficiation, strengthening intra-African trade through AfCFTA, and implementing policies that ensure lasting economic transformation.
The Importance of Africa’s Critical Minerals in the Global Energy Transition
The shift toward clean energy has increased the demand for critical minerals worldwide. Cobalt, primarily sourced from the Democratic Republic of the Congo (DRC), is essential for lithium-ion batteries. Lithium, found in Zimbabwe and Namibia, is a fundamental component of battery storage systems. Manganese, abundant in South Africa and Gabon, is used in battery chemistry to improve energy density and stability.
As countries commit to reducing carbon emissions and phasing out fossil fuels, the demand for these minerals is expected to soar. The International Energy Agency (IEA) predicts that by 2040, demand for lithium will increase more than 40 times its 2020 levels, while demand for cobalt and nickel will grow at least 20 times. This presents both an opportunity and a challenge for Africa.
The AfCFTA: A Game-Changer for Africa’s Mineral Wealth?
The African Continental Free Trade Area (AfCFTA) is a groundbreaking initiative aimed at fostering intra-African trade by reducing tariffs, harmonizing trade regulations, and facilitating cross-border business. It has the potential to transform Africa’s role in the global minerals trade by encouraging value addition and local processing.
According to Ifeanyi Chukwudi, Head of Development at the Centre for Journalism Innovation and Development (CJID), the AfCFTA provides Africa with a golden opportunity to industrialize and strengthen its economies. By refining and processing minerals within the continent, Africa can increase revenue, create jobs, and reduce dependence on foreign nations for processed raw materials.
For instance, instead of exporting raw lithium to China or the United States, African nations could establish regional processing hubs that produce battery-grade lithium. Countries like South Africa, with its well-developed industrial base, could play a leading role in refining critical minerals before they are exported or used in local manufacturing.
Challenges Hindering Africa’s Value Addition in the Minerals Sector
Despite the opportunities presented by AfCFTA, several challenges stand in the way of Africa’s ambition to move up the value chain in the critical minerals sector.
These include:
Lack of Infrastructure – Processing and refining critical minerals require significant investment in energy, transport, and technology. Many African countries still face power shortages and inadequate transportation networks, making it difficult to establish large-scale processing plants.
Foreign Domination of the Mining Sector – Most of Africa’s critical minerals are extracted by multinational corporations based in China, the U.S., and Europe. These companies typically export raw materials without significant local beneficiation. Without strong regulations, Africa risks remaining a resource hub while value addition happens overseas.
Limited Regional Cooperation – African nations often compete for foreign investment in mining rather than collaborating to develop regional supply chains. This lack of coordination weakens Africa’s bargaining power and prevents the establishment of an integrated continental strategy for mineral beneficiation.
Policy and Regulatory Gaps – Many African countries lack clear policies that incentivize local processing. In some cases, outdated mining laws still favour raw material exports over value addition. To change this, governments must implement policies that mandate local processing, impose export duties on raw minerals, and provide incentives for investors in refining and manufacturing.
Environmental and Social Concerns – Mining has significant environmental and social impacts, including deforestation, pollution, and human rights violations. The DRC, for example, has faced criticism over child labour in cobalt mining. As Africa moves towards greater beneficiation, sustainable and ethical mining practices must be prioritized to ensure long-term industry viability.
Lessons from Other Resource-Rich Regions
Africa can learn valuable lessons from countries that have successfully moved beyond raw material exports. One notable example is Indonesia, which banned the export of unprocessed nickel in 2020. This policy led to a surge in domestic smelting facilities, attracting billions in investment and creating jobs. Today, Indonesia is a major player in the global battery supply chain.
Similarly, Chile and Argentina, rich in lithium, are working to establish processing industries to increase their share of the value chain. Africa could adopt similar policies to ensure that its mineral wealth contributes directly to economic development rather than benefiting foreign companies alone.
A Vision for Africa’s Critical Minerals Future
For Africa to fully benefit from its mineral wealth, a multi-pronged approach is needed:
Investing in Infrastructure – Governments and regional bodies must prioritize investments in electricity, transportation, and industrial zones to support mineral processing.
Strengthening Regional Cooperation – Instead of competing for foreign deals, African countries should collaborate to develop shared processing hubs and harmonized regulations that favour local industries.
Enhancing Policy Frameworks – Governments should introduce policies that require local beneficiation, encourage foreign companies to invest in processing facilities, and provide tax incentives for companies that add value to minerals within Africa.
Securing Africa’s Place in the Global Energy Revolution
Africa stands at a pivotal moment in history. With its vast reserves of critical minerals, the continent has the potential to be a key player in the clean energy transition. However, to move beyond its traditional role as a raw material supplier, Africa must take bold and strategic steps to invest in mineral processing, strengthen regional cooperation, and implement policies that favour local value addition.
The AfCFTA presents an unprecedented opportunity for Africa to transform its economic landscape by fostering industrialization and enhancing intra-African trade. However, success will require a concerted effort from governments, regional organizations, and the private sector to build the necessary infrastructure, enforce sustainable mining practices, and develop competitive industries.
If Africa embraces this challenge, it can shift from being a supplier of raw materials to a global hub for clean energy technology, creating jobs, generating wealth, and positioning itself as a leader in the new energy economy. The time to act is now.