- The DR Congo’s 10,000 metric tonne cathode precursor factory would cost US$39 million to develop
- A similar plant in the United States would be three times more expensive.
- An equivalent factory in China and Poland would cost an estimated US$112 and US$65 million.
The Democratic Republic of the Congo (DRC) is a favourable destination for the manufacturing of sustainable battery materials used in high-nickel batteries.
DRC’s significant cobalt deposits and hydroelectric electricity can make it a low-cost and low-emissions manufacturer of cathode precursor materials for lithium-ion batteries.
The country’s 10,000 metric tonne cathode precursor factory would cost US$39 million to develop, according to new research by BloombergNEF (BNEF). Compared to a similar plant in the United States, this is three times less expensive. It is anticipated that an equivalent factory in China and Poland would cost an estimated US$112 and US$65 million.
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Precursor material produced in the Democratic Republic of Congo (DRC) could be cost-competitive with material produced in China and Poland but with a lower environmental imprint.
If cathode precursor materials (the intermediate material between raw and finished cathode material) were produced in the DRC, Poland would handle the production of cathode materials and cells, and Germany would handle the final pack assembly, emissions associated with battery production could be reduced by 30% compared to the current supply chain that runs through China.
A comparison of capital cost to build a 10,000 metric–ton battery precursor plant
The DRC’s proximity to cathode raw materials and its reliance on hydroelectric power plants give it an edge in this production.
Kwasi Ampofo, the lead author of the report and BNEF’s head of metals and mining said the DRC’s cost competitiveness comes from its comparatively cheap land access and low EPC, or engineering, procurement, construction, cost compared to the US, Poland, and China.”
Battery precursors for European cell makers currently come mostly from China. However, in most cases, the raw materials for batteries are sourced from Africa and refined in China before being transported to the European Union.
A reduction of the transport route and use of hydroelectric power in the DRC’s grid and accessibility to raw materials should help European automakers reduce their emissions. In research released this week, the electric car market has a potential of US$7 trillion from now until 2030, and an additional US$46 trillion between now and 2050.
The Bloomberg BNF report, “The Cost of Producing Battery Precursors in the DRC,” was unveiled during the DRC-Africa Business Forum in DRC on November 25. The forum ends tomorrow.
DRC produces 70 per cent of the world’s cobalt yet just 3 per cent of the battery and electric car value chain is accounted for by the country.
The African Continental Free Trade Area (AfCFTA) creates the world’s largest free trade area by covering 54 African Union countries. To develop a global electric car manufacturing base in Africa, the continent’s enormous natural resources, expanding demand for vehicles and rapid urbanization may be harnessed.
To produce lithium-ion batteries, the DRC needs other upstream mineral inputs such as manganese from South Africa and Madagascar, copper and graphite from Mozambique and Tanzania, phosphate and lithium from Morocco. The AfCFTA makes it easier for the DRC to receive these minerals from the other African countries.
There are some prominent leaders in electric-vehicle and cell manufacturing now, but the sheer magnitude of development projected in the coming decades means that there is inherent uncertainty as to which firms and nations will come to dominate this new value chain in the future.
As more of the lithium-ion battery supply chain moves to Africa, the continent’s natural resources could play a significant role.
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The UN Under-Secretary-General and Executive Secretary of the United Nations Economic Commission for Africa (ECA), Vera Songwe, says that Africa is well into the Decade of Action and has only 9 years left to deliver on the SDGs.
She adds that AfCFTA provides a compelling case for the DRC to leverage its, and Africa’s abundant mineral and clean energy resources, to become a growth pole of the global clean energy transition and inclusive resilient development that leaves no one behind.
“DRC might become a regional and global hub for the manufacturing of precursor materials for batteries that would propel a fourth industrial revolution. In this way, the country and the rest of Africa can gain access to the more lucrative USD1.4 trillion combined battery cell production and cell assembly parts of the global battery materials value chain. Wind and solar energy from North African countries, the Sahel, and South Africa, geothermal energy from East Africa, and hydroelectricity from Central and West Africa can all be harnessed to meet this demand,” Songwe added.
She however cautioned that to reap these benefits, African leaders must make the commitment to facilitate the needed investments and make the AfCFTA deliver for the continent.
The head of energy storage at BNEF, James Frith, said: “For regions to attract battery production, they must have either a supply of crucial raw materials or a need for batteries in the area. With raw materials, they can entice downstream manufacturers by showcasing their supply. To be close to their clients in the automotive industry, manufacturers will relocate to the region if there is a local need for batteries. An abundance of crucial battery raw materials is available in Africa that might be used to attract more value-added processing and manufacturing activities in the downstream.”
“There is a long road ahead of us before we can achieve net-zero emissions around the world. Rapid implementation of low-carbon transition projects with open governance frameworks can bring significant long-term economic value to Africa’s emerging economies,” stated Ashish Sethia, global head of commodities at BNEF.
For Africa to benefit meaningfully from its abundance of energy transition metals, it has to change the extraction model.
Africa Finance Corporation President & CEO, Samaila Zubairu says that, unlike previous price booms, African countries need to move up the value chain through mineral beneficiation, smelting and refining, and move away from exporting unprocessed commodities.”
Dr. Sidi Ould Tah who is the Director-General of the Arab Bank for Economic Development in Africa (BADEA) said the prospect of expanding the value chain of development of lithium-ion batteries and electric vehicles value chains to DRC and Africa is both financially and environmentally appealing.
He assured that BADEA is ready to mobilize its own resources to finance investment projects around this critical value chain in DRC and around the continent. He added that they will also mobilize partners from the Arab Coordination Group, as well as from public and private investors from the Arab countries.
African Development Bank (AfDB) President Dr. Akinwumi A. Adesina said that the BloombergNEF report reinforces what Africa has consistently advocated. He reiterated that Africa’s mineral resources must be utilized for the development of the continent which requires a radical change from dependency on the export of raw commodities, with very little or no value addition.
“Manufacturing battery precursors will give value to our natural resources, grow renewable energy technology, boost industrialization, light and power Africa, and provide jobs for millions of young Africans,” he noted.
The Africa Legal Support Facility (ALSF)’s Director & CEO, Olivier Pognon, said that such information is valuable for negotiating fair and equitable contracts that ensure that Africa retains the maximum value from her mineral resources, while also contributing to the global energy transition.
ECA, Afreximbank, AfDB, AFC, BADEA, ALSF and the UN Global Compact commissioned the report.
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