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From mines to markets: How Africa and Europe can become green industry partners of choice

From mines to markets: How Africa and Europe can become green industry partners of choice
Workers load lithium concentrate at Prospect Lithium Zimbabwe mine in Goromonzi, Zimbabwe, January 9, 2024. REUTERS/Philimon BulawayoImage bypicture alliance / REUTERS | PHILIMON BULAWAYO ©

I participated yesterday in an online webinar organized by KU Leuven MSc International students on “Strengthening EU-Africa Partnerships for CRM Security through the Global Gateway Initiative.” I used the occasion to discuss my research, including the recent ECFR paper on how Europe and Africa can partner for mutually beneficial outcomes on critical minerals.

For the partnership to work:

Europe [the EU] must:

  1. Have a clearer stance on its value chain participation in Africa – is it willing to fund EU-domiciled companies to participate in direct upstream mining, midstream, and downstream processing or just happy to provide ancillary infrastructure such as Ports and railways? This is key in terms of understanding its value proposition. For many African countries, the provision of ancillary infrastructure, while a useful, necessary condition, is not enough to bring about value addition. It must go together with companies [regardless of where they are coming from] committing to in-country processing and value addition, such as making precursor battery cells, which can then be shipped along the new rail tracks.
  2. Provide financing instruments with DFIs to deliver integrated infrastructure (incl. roads, rail, and processing facilities) and pursue the regional corridors approach – e.g. Lobito Corridor. The EU has identified 12 Strategic Corridors in Africa. But these require multi-sectoral investment instruments to unlock their value and also link them to non-resource sectors such as the agriculture value chain.
  3. Push for stricter ESG principles in responsible mining value chains (including skills development, promotion of research, development, and innovation, and technical assistance to respective African countries in areas such as geological surveys, fiscal regimes, and other regulatory reforms).
  4. African and Chinese membership of the Minerals Security Partnership is key to deepening multilateralism and enforcing responsible supply chain principles.

Africa [including institutions such as the AU, AfDB and others] must:

  1. Find resources to develop a bankable pipeline of projects [feasibility studies, ESIA's, etc.] along these corridors [e.g. building midstream factories to make full battery cells or components such as cathodes and anodes], which are aligned with their national and regional development strategies and needs. This is one way of helping to derisk the investment profile, allowing the entry of credible financial partners and giving Africa skin in the game.
  2. Improve the business environment – the cost of business, , killer taxes, etc.
  3. Leverage some of their Sovereign Wealth Funds to invest in these regional projects. It must not always be about foreign multinational firms coming to invest on the continent. African-domiciled energy and infrastructure companies and SWFs should also put their money where their mouths lay. The Gulf Countries are already aggressively doing this.

Access the full report here.

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