To benefit from the latest surge in global demand for strategic minerals, African countries must learn from past experiences and build transparent processes that advance stability and benefit ordinary citizens.

Africa is at the center of rising global demand for critical minerals and metals such as lithium, graphite, cobalt, manganese, platinum, tantalum, and bauxite needed to support modern technologies and manufacturing. African countries hold sizable shares of known reserves for many of these critical minerals. Key sectors reliant on these critical minerals include automotive and aeronautical systems, mobile phones, computers, electronics, energy, medical technologies, and steel production, among others. Such minerals are also increasingly taking center stage in global geopolitics as China accounts for 87 percent of the global processing of strategic and rare earth minerals.

Previous eras of natural resource extraction from Africa have been highly disruptive and destabilizing, contributing to what became known as the natural resource curse, where countries with relatively more abundant natural resources tended to become more autocratic, corrupt, and conflict prone while lagging in their development. This instability, in turn, made investing in Africa less attractive to countries and companies committed to higher standards of transparency and mutually beneficial partnerships.

To examine how Africa can manage the latest surge in demand for critical resources to benefit its long-term security and economic prosperity while forging stable, mutually beneficial external partnerships, the Africa Center for Strategic Studies spoke with a leading African authority in African strategic minerals and mineral supply chains, Christian-Géraud Neema. Mr. Neema worked as a project manager for a Congolese mining company in his native Democratic Republic of the Congo (DRC) and later as a consultant on good governance and policy advocacy. Mr Neema is the Africa editor of the China-Global South Project where he manages its interactive database on mining, production, and supply in the DRC.

The latest surge in demand for Africa's critical minerals and metals occurs against the unfortunate backdrop of a lack of African preparation to develop a solid infrastructural base to derive the benefits of the strategic minerals and rare earths ecosystem.

Policies must match industrial and human resource capabilities and inputs.

We are talking here about basic provisions like reliable electricity, water supply, transportation networks, and reliable communications, as well as the maintenance required to expand and keep them running. The DRC, for instance, has a very low electrification rate and most of its infrastructure is either nonfunctional, outdated, or in a serious state of disrepair. This vast country also has one of the most underdeveloped transport infrastructure landscapes in Africa, putting it in a weak position to benefit fully from its proven endowments. These problems are not unique to the DRC and affect other countries with significant mining industries.

African countries still lag when it comes to key human competencies like chemical, mining, and industrial engineering, metallurgical engineering, environmental science, and economics. These cannot be developed overnight, but through a sustained process backed up by mutually beneficial international partnerships that add value to what each country wants to achieve.

Even where policies are in place to require prospective foreign firms to refine minerals locally, institutional bottlenecks remain a major impediment. Zimbabwe is a good example. The government gave miners (mostly Chinese) until March 2024 to submit plans on refining lithium in the country. However, due to the lack of domestic industrial capacity, these companies are simply breaking down lithium-bearing rocks (such as spodumene) to obtain liquid lithium concentrate. While this involves a multistep process, lithium concentrate is still raw lithium. As a result, Zimbabwe is still exporting a raw material and not moving up the value chain as intended. The big lesson here is that policies must match industrial and human resource capabilities and inputs.

African countries, meanwhile, often do not have a significant domestic market for the finished products they must then buy back at an exorbitantly higher cost. Let's take a look at the electric vehicle (EV) market. China has the world's largest market, with around 60 percent of the world's EV sales. Next is Europe with 25 percent. The United States has around 10 percent. The African share of the world's EV market is very small. In Kenya, a potential growth market, EVs account for about 350 of the country's 2.2 million cars. In South Africa there are only 6,000 EVs out of 12 million cars. In total, Africa has less than a 1-percent share of the world's EV market.

Considering this, efforts by African governments to get foreign firms to locally refine the components for EV batteries (of which lithium is only one element) and even manufacture batteries is a tough ask. In contrast, the foreign powers racing for Africa's strategic and rare earth minerals all have policies in place to secure reliable supply chains and stockpiles as quickly as possible.

For the latest global mineral drive to be a boon for Africa, African countries need to invest heavily in research and development, take steps to address their lack of industrial capacity, and develop the skills and technologies for processing these minerals. In the interim, they need to identify and develop solid competencies in niche areas within the mining ecosystem.

"Political stability comes from democratic and accountable governance."

Three vicious cycles left African countries particularly vulnerable during previous mining eras. First, bad governance crept in early on, epitomized by coups, civil wars, and some of the worst forms of kleptocracy and personalized rule. Second, elites began to view national resource endowments as a mechanism to raise quick and steady sources of private revenue to entrench their rule, buy loyalty, and create a patronage network. Third, foreign firms were able to circumvent national regulations so long as they worked closely with regime elites. Many of these companies--due to their capacity to extract raw materials and generate foreign exchange--effectively became a means through which regimes kept themselves in power.

There was very little incentive to enforce laws requiring good corporate citizenship, accountability, and good stewardship of national resources. This largely explains why the continent's top producers of crude oil did not invest in refining capacity, leaving them reliant on imported fuel.

To break these vicious cycles and put Africa on a path to benefit from its natural resources, three priorities must be pursued.

First, Africa needs better governance to avoid repeating past mistakes. When political survival is the primary objective, no amount of enabling policies for accountability and good stewardship of resources can take effect.

Second, there is a need for robust public engagement, involvement, and oversight of the extractives industry. This happens through institutions like parliament, transparency and accountability initiatives, contract and license disclosures, nongovernmental organization awareness and advocacy, private sector involvement, strategic litigation, and human rights monitoring.

"[Higher standards of conduct] build the foundations for stable, enduring, and beneficial partnerships for foreign firms and citizens."

Lastly, foreign companies should hold themselves to higher and robust standards of conduct to ensure that they follow local laws and regulations, exercise good corporate citizenship, and make every effort to mitigate the unintended consequences of the extractives industry. These practices build the foundations for stable, enduring, and beneficial partnerships for foreign firms and citizens.

Political stability comes from democratic and accountable governance. This largely explains why Botswana has handled its diamond industry as well as it has. Many other settings have not fared as well. Take the DRC. From its earliest days, national elites viewed the country's astounding mineral wealth as functional to entrenching their rule. They were hostile to creating a climate of accountability and stricter regulations as these would be tantamount to undercutting their primary means of survival. There was simply no political bandwidth to build functioning state institutions, infrastructure, and human capital. Short-term political calculations were the order of the day. Nothing sustainable can be developed in such a context.

Otherwise, best practices include reviewing and implementing existing African Union (AU) regulatory policies to capitalize on mining opportunities, investing in research and development, developing a training hub that can systematically produce much needed human resource capacity, improving their negotiating capacity, and creating a predictable investment climate. I cannot overemphasize the importance of accountability and oversight, given the vicious trap in which resource-rich countries have consistently found themselves since independence.

"Foreign firms will play by the rules if local actors respect their own laws."

Foreign firms will play by the rules if local actors respect their own laws, apply them evenly, and respect the rights of their citizens to be involved in monitoring. However, they also have a responsibility to adhere to their own regulations, domestic and international laws, and standards of good corporate governance and citizenship. It must be a two-way process, otherwise one or more parties will always feel cheated. We must remember that while mining is lucrative, it can come with numerous unintended consequences that could undermine safety, security, and stability. There is no shortage of past examples to reflect upon and avoid.

The AU has a role to play as do the Regional Economic Communities (RECs). The African Charter on Democracy, Elections and Governance provides an overarching framework for democratic stability without which economic competitiveness is elusive. In 2009, the AU released its African Mining Vision, underscoring the importance of moving up the value chain. In 2019, the AU issued an African Commodities Strategy that aims to transform Africa from a raw materials supplier to one that can add value to its materials and integrate into global value chains. The was set up in 2016 to coordinate and oversee the African Mining Vision. However, it is not yet operational as it has not been ratified by enough member states.

The RECs have a role to play, particularly in helping countries work together and specialize in the regional mineral ecosystem. For instance, it would make sense for Zambia to pursue a regional agreement to export its raw lithium to South Africa for refinement into more valuable products like lithium hydroxide. However, such arrangements depend greatly on the prerequisites discussed earlier. Furthermore, regional value-addition programs of this kind can only be effective when national wealth is not looked at as a means of political survival. Otherwise, national elites are less incentivized to "send" their valuable resources for refinement to a third country. In other words, we need a sea change in thinking as far as national resources are concerned.

Having said that, some policy innovations have been attempted. For example, the DRC and Zambia have a shared policy in place to strengthen their mineral value chains, share expertise and infrastructure, and collaborate on battery production for EVs for export to advanced markets.

Morocco has positioned itself as a key player in the EV industry due to its proximity to Europe and strong industrial and technological base. This attracted some Chinese EV battery parts makers to set up production lines in the country targeting the lucrative European market. Uganda, Zambia, and Zimbabwe have enacted policies forbidding the export of raw or semi-processed materials. However, additional steps will be required if they are to reap the intended benefits.

The key actors are governments, the private sector, civil society, regulators, oversight bodies, and strategic litigants. A good strategic minerals policy is also multifaceted, future oriented, and focused on enhancing beneficiation. Ghana serves as a good example. Its policy on banning the export of raw and semi-processed materials is buttressed by a nine-point framework consisting of:

African stakeholders in government, the private sector, and civil society need to invest in more applied research to understand this industry, the political economy in which it operates, the science and technology behind it, developments around the world, and what it will take to position African countries properly. We must also invest in tomorrow's technology, bearing in mind that this is a fast-moving industry. We stand to lose out again if we don't think several steps ahead.

Let me explain what I mean. China, for example, has been investing massively in research and development to diversify away from lithium and cobalt toward minerals that are more readily available, like sodium. If they make a full transition to developing alternatives, they will reduce or even eliminate their dependence on cobalt and lithium-rich countries. In July 2024, China opened the world's largest sodium-ion battery energy storage system--part of a long-term effort to build large-scale storage systems using non-lithium technologies. Lithium-rich African countries cannot ignore such technological developments or else we may find ourselves with stranded assets. This is why I argue that African countries are missing the point by solely focusing on the technologies of today. We must look at the technologies of tomorrow and adjust accordingly.

African stakeholders need to figure out where we want to sit in the strategic minerals ecosystem and build toward that. This will require understanding the gap between political rhetoric and what it will realistically take to get foreign firms to meet us halfway. We must invest seriously in training, science, and applied technology, and ask our foreign partners to support this as part of their investment package. We need to solve the basic problems of reliable water and electricity supply and transportation. We need democratic stability and good political and economic governance.

We must figure out our economies of scale, work out potential regional economic arrangements, and figure out what niche we want to develop in the global supply chain.

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