In the tree-topped southern hills of Mozambique’s Cabo Delgado province, the sprawling Balama mining complex looms out of the crimson earth. Here, employees of Australia’s Syrah Resources work a 107-megatonne graphite reserve which will help to power electric vehicles manufactured by Elon Musk’s Tesla, the most valuable car maker in the world.
Surface explosions at the site throw up clouds of red-grey dust and stones, part of a process of open-pit mining to dislodge the valuable material before it is hauled away for crushing, grinding, floating, filtering, drying, screening and bagging. On leaving a giant warehouse at Balama, the concentrate of graphite – a crystalline form of carbon – is transported to the Indian Ocean port of Nacala for its onward journey to the global market.
From the third quarter of this year, Balama produce will make its way to a new Syrah facility in Vidalia, Louisiana – funded with a loan of up to $107m from the US Department of Energy – in which the concentrate will be processed into natural graphite active anode material for electric vehicle batteries.
In December 2021, Syrah signed a four-year deal with Tesla to supply graphite anode from the plant – a relief for a carmaker which has struggled to secure supplies in the US at the specifications and capacity it requires. With the Balama mine having an expected life of over 50 years, the deal could be the start of a lucrative relationship.
The sophisticated supply chain linking the mines of Mozambique with a processing plant in Louisiana and the high-tech automaker of California is a potent illustration of the global reach and growing importance of the critical minerals industry – a sector that will play a key role in this century’s geopolitical trends – including the shift from a fossil-fuel to a renewables economy and the US-China contest for global hegemony.
Nowhere will this be played out more intensely than in Africa, which once again finds itself at the centre of a resources scramble of global significance.
Dozens of critical minerals are found on the African continent. The Australian government defines these as metallic or non-metallic elements that are essential for modern technologies, economies or national security and have supply chains at risk of disruption.
Many are valuable “transition metals” – a group of elements including cobalt, nickel, manganese and chromium, which will play a key role in the shift from fossil fuels to low-carbon energy sources. Decarbonisation is driving demand for a range of minerals including these, graphite, lithium and “rare earth” elements such as neodymium, samarium and yttrium. They will underpin technologies crucial to the energy transition, including wind turbines, solar panels and electric vehicles.
From north to south, Africa’s reserves of such metals are prodigious. Morocco has 70% of the world’s phosphate reserves; DRC has 50% of the world’s cobalt; Gabon has up to 15% of the world’s manganese; South Africa has 91% of the world’s platinum, 46% of its yttrium, 22% of its manganese, 35% of its chromium and 16% of its vanadium. The wider southern African region is home to substantial untapped lithium resources, used primarily in the construction of lithium-ion batteries for electric vehicles and grid-scale storage.
Overall, the continent has at least a fifth of the world’s reserves in a dozen minerals that are critical for the energy transition, according to the Natural Resource Governance Institute (NRGI) Triple Win report – “which makes Africa essential in the just energy transition,” says David Manley, NRGI lead economic analyst for the energy transition. Furthermore, the continent is relatively unexplored and has the lowest concentration of known mineral wealth in the world, the organisation says.
The global scramble for such minerals is only beginning. The World Bank has studied the clean energy production needed to keep global heating below 2°C by mid-century. It concludes that production of graphite, lithium, and cobalt will need to be ramped up to 3.1bn tons by 2050, up more than 450% from 2019 levels, to meet demand from energy and energy storage technologies.
How Africa responds to the insatiable demand for its critical minerals could determine the continent’s growth trajectory in the decades to come. But having vast reserves is not the same as exploiting them successfully. The “resource curse” that has defined Africa’s relationship with the extractive industries in the post-colonial era has ensured that value is more often shipped abroad than retained at home. Half a century of institutional failure looms large…