Mathew Dzingai - Opinion | The Crucial Role of OEMs and Africa's Critical Minerals in Clean Energy Transition

In an era defined by the pressing need to address climate change and reduce carbon emissions, the global community is embarking on a transformative journey toward clean energy technologies. At the heart of this transition lie critical minerals—fundamental components for various clean energy innovations like batteries, electric vehicles, wind turbines, and solar panels. Original Equipment Manufacturers (OEMs) emerge as key orchestrators in the intricate supply chain of these minerals, while the resource-rich continent of Africa holds the potential to wield substantial influence over the global production and processing of these essential elements. In this catch-up, I delve deep into the symbiotic interplay between OEMs, critical minerals, and Africa's pivotal role in steering the trajectory of the clean energy transition.

Critical minerals stand as the pillars upon which modern technological progress rests, empowering the development of sustainable and efficient clean energy solutions. OEMs, as the linchpins of the manufacturing sector, heavily rely on these minerals to construct products that drive the wheels of the clean energy revolution. The vitality of critical minerals is exemplified by electric vehicle batteries, where minerals like lithium, cobalt, and nickel serve as cornerstones for optimal performance. The wind energy sector hinges on rare earth elements for its turbine magnets, while solar panels harness sunlight through materials like silicon and cadmium telluride

The role of Africa in this narrative cannot be overstated. Home to approximately one-third of the world's mineral resources, Africa boasts a vast reservoir of critical minerals, including copper, lithium, nickel, cobalt, and rare earth elements. This natural bounty positions the continent as a potential juggernaut in the global critical minerals supply. However, the extraction and processing of these minerals carry an array of challenges, compounded by their energy-intensive nature and the potential for consequential environmental, social, and governance impacts.

Within this intricate landscape, policymakers step onto the stage as the navigators of this critical journey. Their role is pivotal in steering the course of critical minerals as either vital enablers propelling clean energy transitions or potential bottlenecks thwarting progress. Striking the delicate equilibrium between sustainable extraction practices, economic gains, and environmental accountability emerges as a formidable task. Policymakers are tasked with shaping regulations that foster ethical mining practices, uphold fair labor standards, and minimize the ecological footprint of mineral extraction and processing.

Among the myriad challenges that policymakers grapple with, perhaps none is as pronounced as the task of managing the geopolitical competition for Africa's prized critical mineral resources. The surge in global demand for these minerals has ignited a fierce competition among nations vying for secured access. Policymakers are entrusted with the complex duty of negotiating agreements that align the interests of Africa and the international community, simultaneously safeguarding the continent's resources from exploitative practices. This intricate balancing act is quintessential to engender equitable economic growth while ensuring that the benefits of the clean energy transition reverberate across all stakeholders.

The realm of negotiations further extends to investments and royalties, amplifying the role of policymakers in securing just compensation for the extraction and export of these critical minerals. Through skillful negotiation with mining conglomerates, governments can extract maximum value from their mineral resources and funnel the resulting revenues into sustainable development initiatives, social welfare programs, and education endeavors. This approach harmonizes with the principles of responsible resource management, engendering a positive local impact amid the transition to clean energy.

Facilitating the integration of Africa's critical minerals into the global supply chain necessitates the establishment of robust infrastructure, signifying a juncture where private sector collaboration dovetails with policymaker initiative. Collaborative investments in transportation, refining, and processing facilities become pivotal, streamlining not only the movement of minerals but also fostering value addition through job creation and economic growth. Additionally, environmental risks associated with mining and processing activities mandate policymakers to strengthen regulations and endorse sustainable practices. This multifaceted strategy mitigates detrimental impacts, ensuring that mineral extraction becomes a catalyst for both environmental preservation and local community advancement.

?Recognizing Africa's pivotal role as a critical minerals epicenter, international stakeholders are taking concerted steps to fortify the continent's stature as a primary investment destination. The inaugural Critical Minerals Africa summit to be convened in Cape Town, during 17-19 Oct 2023, could attract delegates from the US, Europe, UK, Canada, Australia, China, Japan, South Korea, and beyond. This landmark event was conceived with the vision of bolstering African critical minerals production and processing capacity, formulating roadmaps to guarantee minerals and energy security, and stimulating capital influx and buyers' interest in African projects. The collaboration between policymakers and private sector participants serves as a testament to the unified commitment to harnessing Africa's mineral wealth for collective betterment.

The quest to secure a continuous supply of minerals has prompted industry behemoths, including automakers, battery cell manufacturers, and equipment producers, to actively immerse themselves within the critical minerals value chain. The adoption of long-term offtake agreements as standard procurement strategies ensures a reliable mineral supply. However, the horizon stretches beyond mere agreements as pioneering enterprises venture to directly invest in the critical minerals value chain. By engaging in the full spectrum of activities—from mining and refining to precursor materials—these enterprises not only cement a stable supply but also foster the evolution of local industries and expertise.

Summarily, the convergence of OEMs, critical minerals, and Africa occupies a pivotal role in shaping the trajectory of the clean energy transition. OEMs emerge as architects shaping products that evoke demand for critical minerals, while Africa's substantial resources emerge as a wellspring for global supply. Policymakers, their hands firmly on the helm, must navigate the multifaceted challenges intertwined with the production and processing of critical minerals, be it geopolitical competition or environmental responsibility. Through a synergy of public-private collaboration, policymakers can unlock Africa's mineral potential in an equitable, sustainable manner—propelling economic development and steering the global transition towards clean energy technologies. As the world collectively strives for a sustainable future