Africa has the potential to play a significant role in the global energy transition, given its endowment of critical minerals such as lithium and cobalt; however, realising the full potential of these resources requires a strategic approach to developing manufacturing capacity and scaling up production and exports.

This was noted in a panel discussion, at the recent Manufacturing Indaba, on how resource extraction and industrialisation offers pathways for African countries to move up the value chain, create high-skilled jobs and foster technological innovation.

“We need to explore all the ways of how to deepen those value chains, how to leverage those critical minerals towards beneficiation, towards manufacturing and towards value addition more broadly . . . it's not a linear pathway.

“We have to start thinking about how do we bring the opportunities in a bit more of a diversified way,” said Trade and Industrial Policy Strategies senior economist Gaylor Montmasson-Clair.

Localisation Support Fund executive head Thami Moatshe noted that an abundance of critical minerals provided an opportunity for African countries to deepen their industrialisation, as well as provided an opportunity for economic diversification.

She added that the creation of new industries would also subsequently require the upskilling of the current workforce, which presented an opportunity for job creation.

Additionally, Moatshe noted the importance of the African Continental Free Trade Area and regional collaboration in leveraging mineral resources, noting that South Africa was well positioned as a regional hub in this regard.

She also expressed that African countries should be proactive in ensuring they gear up to meet the critical minerals demand.

“With an opportunity like this, with these emerging new industries, we should take the opportunity not to just be reliant on exporting minerals but [on] processing them and producing components . . . out of that,” she said.

She added, however, that despite manufacturing capabilities, locally manufactured products competed with cheaper imports, thereby hindering demand for locally manufactured products.

Hence, she argued for government interventions to help increase competitiveness.

“Competitiveness becomes the key to be able to secure that demand, but that competitiveness has to be supported by other things.”

Also speaking on the panel, Industrial Development Corporation of South Africa strategic business unit head for basic and specialty chemicals Hilton Lazarus noted that extending Africa’s battery minerals value chain to include battery assembly and component manufacturing would be capital intensive, requiring collaboration, clear regulatory frameworks and incentives to attract investors.

Africa would, however, need to address the issue of electricity supply constraints, as a stable and affordable energy supply is needed to support industrialisation and beneficiation.