Africa investor (Ai), in collaboration with Tahuti Global, launched an investor briefing entitled Climate Financing in Africa – A Solution for The Global Critical Minerals Shortage and Regional Sustainable Development, during the Africa investor (Ai) NDC Investment Summit and Awards, held in collaboration with the African Union Development Agency (AUDA), The NDC Partnership, The International Energy Agency (IEA) and The International Chamber of Commerce (ICC).
The transition to a low carbon global economy is highly dependent on the supply of critical materials.
A report by the International Energy Agency (IEA) found that the World needs 50 more lithium mines, 60 more nickel mines and 17 more cobalt mines by 2030, to meet global net carbon emissions goals. That is less than 7.5 years from now. The IEA concluded that the mining sector is the section of the supply chain that needs immediate investments, as the development period is much longer than the other parts of the supply chain. Particularly in developed nations like Canada, United States, Europe, and Australia, where mining is often perceived as a dirty industry and environmental permits are slow, in some cases requiring more than a decade from the initial feasibility studies to production. Without aggressive measures the shortage of critical minerals is imminent.
Many countries around the world are trying to develop battery supply chains from mine to manufacturing.
Africa is a resource rich continent, with an extensive history of mineral production. The briefing sets out, that with appropriate investment and regulations, Africa could become an essential and immediate investment destination and source of sustainable critical materials and finished green technologies.
The growth of the mineral sector in Africa, will also spearhead the industrialization of the continent, mobilize capital at scale for renewable energy investments and towards downstream industries like battery production and car manufacturing and emerging new industries.
A regional mine to manufacturing paradigm, presents a huge opportunity for African countries to utilize their resource endowments for industrial development, by pursuing local, responsible and human rights compliant supply chains and supporting the diversification of global technology value chains, ensuring Africa optimises access to the $10trn per annum and growing global green industrial economy.
The key requirements for investors are competitive resources, energy availability/potential, infrastructure, markets, and willing partners/governments, which Africa can deliver. Another important aspect for investors is political risk, and that too is being addressed with the Model Law – Institutional Investor-Public Partnerships (ML-IIPP), launched this week at COP27 (link to Ai model law press release), which is a legal and regulatory investment framework to mobilize private capital and scale and for that capital to be deployed at speed, that has received political support and is backed by domestic and global investment institutions.
Dr. Hubert Danso, CEO and Chairman Africa investor (Ai) and Chairman, African Green Infrastructure Investment Bank (AfGIIB) added: “Africa is ready to engage with institutional investors, miners, union investment funds, development banks, industrial companies and civil society, to build an equitable and investable, mine to manufacturing, responsible supply chain and production, just energy transition paradigm and become a major human rights compliant, sustainable source of cleaner critical technologies, produced for the local and global markets, as we race against time towards our low carbon world.
Dr. Luisa Moreno, Managing Partner, Tahuti Global and one of the authors of the briefing explained “African countries must absolutely develop battery supply chains from mine to manufacturing, to accelerate and deepen economic growth. That includes responsibly developing and operating mines and refining capabilities regionally, to produce the advanced compounds and metals that are used in alloys, batteries, electric motors, and other devices that go into electric vehicles and other renewable technologies”.
Read the briefing here