Cooperation instead of development aid – How Europe and Africa could benefit from the energy transition

Berlin They are the ingredients of the energy transition: lithium, cobalt, manganese. Cell phones won’t work and electric cars won’t drive without these minerals. A large part of these mineral resources are located in Africa. So far, they have mostly been exported from there for further processing – above all to China, which controls the global supply chains for batteries.

This is not only a problem for Africa, whose population hardly benefits from the added value, but also for Europe. Because the successful transition to a climate-neutral economy depends on batteries in which green electricity can be stored on a large scale.

Now some states on the African continent no longer want to export their important raw materials, but refine them in their own country. A decision that could reorganize the market for battery raw materials – in favor of Europe.

So far, Chinese supremacy in the battery sector has been overwhelming: In the Democratic Republic of the Congo, which has the world’s largest deposit of cobalt, 15 of the 19 mining companies are in Chinese hands. Of the 136 electric car battery factories currently in operation or planned around the world, 101 are in China.

At the same time, demand in Europe is increasing: According to a study by the University of Leuven, the demand for lithium in the EU will be 35 times higher by 2050 than it was in 2020, and the demand for cobalt up to four times higher. To date, China has been by far the most important supplier of these critical raw materials.

The way out of addiction

In view of the increasingly difficult relationship with China, the Federal Government is pushing ahead with greater diversification of the raw material sources of German industry. In the Federal Chancellery, however, there is also the opinion that German companies must be more involved in the promotion and processing of the substances.

>> Read here: German economy calls for more support for investments in other countries

“The German automotive industry is very concerned with the question of how to become less dependent on imports, especially from China,” observes Tobias Heidland, head of the International Development Research Center at the Kiel Institute for the World Economy (IfW).

Now might be the right time for that. Because some domestic political decisions in the African exporting nations are currently leading to the situation that the balance of power on the global market for critical battery raw materials could be redistributed. Earlier this year, Zimbabwe imposed an export ban on unprocessed lithium – a material that has so far been indispensable for batteries. The Southeast African country has the largest lithium deposits on the continent.

In Nigeria, which also has lithium deposits, the government had rejected an investment by the electric car manufacturer Tesla because the company only wanted to exploit the country’s deposits. Guinea ordered an export ban on bauxite, which is needed for aluminum production and whose global deposits are mostly in the West African country.

Executive Secretary of the United Nations Economic Commission for Africa, Vera Songwe

The own processing of raw materials could promote the economic development of African countries.

(Photo: IMAGO/Xinhua)

Gabon, which has about a quarter of the world’s manganese deposits used in battery production, also wants to keep its raw materials in the country in the future. “The model of exporting raw materials does not create any jobs for us,” criticized Economics Minister Hugues Mbadinga Madiya in the newspaper “The Africa Report”.

Cooperation with benefits for everyone

Unlike Chinese companies, for example, Europeans are obliged to take environmental standards and social factors into account. This could now be an advantage if the Europeans want to convince the Africans of a partnership. “Both sides must consider together how they can benefit from the cooperation,” demands IfW expert Heidland. He sees the green hydrogen project, for example, which the federal government is currently promoting in Namibia as a role model in order to improve the energy supply there, but also in Germany.

The Executive Secretary of the United Nations Economic Commission for Africa, Vera Songwe, also mentions German cooperation with Namibia on hydrogen and calls for a similar dialogue in other areas. “The same exchange should now take place between Germany and Zambia, the Congo and Botswana on electric cars,” Songwe demands in the Handelsblatt. “The future of the world is digital, and digital means chips and lithium, and lithium means Africa,” she says.

According to Songwe, keeping production in the country would give many African countries an economic boost: “If we were to produce iPhones and Teslas in the Democratic Republic of the Congo, we would no longer need development aid.”

Chinese are faster so far

The first lithium processing plants in which batteries for electric vehicles will be produced will soon be in Nigeria. But the bad news for Europe is that the Chinese Ming Xin Mineral Separation Nig was awarded the contract for the plant. In Zimbabwe, too, everything currently indicates that the companies that process lithium there will come from China.

If German companies want to get a foot in the door, they have to make clear the advantages of cooperation for the African partners. In African markets, the biggest hurdle is insufficient access to capital, says IfW expert Heidland.

“African companies often don’t find the seed capital to create local jobs and grow,” he says. Some of this missing money could come from Germany, says Heidland.

More: How Germany wants to win the race with China in Africa

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