December 21, 2021 • 4 min read
Can Africa become a strategic supplier of battery-grade minerals to the European market?
Demand for electric vehicle (EV) batteries is expected to reach around 400 GWh by 2028, according to the European Economic and Social Committee’s Strategic Action Plan on Batteries.
As a result, demand for materials to produce these batteries will soon outstrip supply. And Europe – a large consumer and producer of EVs – is at the center of an imbalance that could put the region’s decarbonization ambitions at risk.
“For Europe to meet its future demand for energy transition materials, it needs a greater security of supply from sources it either owns or can manage through long term agreements,” says Nick Bell, Global Sector Lead, Mining, Minerals and Metals. “It also needs products made with lower carbon materials from lower impact mines to meet environment, social and governance (ESG) expectations.”
But what complexities will Africa materials suppliers, and European battery producers, encounter as they partner to scale up battery production?
The challenges facing African miners
With proven reserves and vast, unexplored regions, Africa can supply battery grade materials to Europe, while also providing economic growth opportunities for local communities.
But how can miners reposition themselves to supply sustainably mined battery-grade minerals to the European market at the pace required?
“There are several vulnerabilities in the critical minerals supply chain that may hinder adequate supply, leading to greater price volatility if supply proves fragile,” says Bell. “These risks include a high geographical concentration of production and processing led by non-Western governments, long project development lead times if traditional processes are followed, declining resource quality, growing scrutiny of ESG issues, and exposure to climate risk in high water stress areas.
“However, arguably the biggest challenge is the emissions intensity of the energy used to power mine sites.”
Meeting the ESG expectations of European battery producers
Many Africa-based miners need to increase their investment in emissions reduction across the mining value chain to meet the sustainability requirements of the European batteries market. But the energy transition equally represents a big financial opportunity for mining companies.
“We’re partnering with our customers to help draft energy transition roadmaps and navigate the associated decarbonization challenges,” says Bell. “Because productivity is still essential, especially during times of transformation.”
He points to a large iron ore mining complex in Canaã dos Carajás, Brazil.
“This project is an example of diesel displacement driven by the need to be more sustainable. It has an in-pit crushing and conveying system that uses conveyor belts to replace trucks, helping to reduce diesel consumption by around 70 percent.”
At the same time, mine operators across the world are turning to electrification and the greater use of EVs. Displacing diesel can remove up to 50 percent of a mine site’s emissions.
However, generating the capital to reinvest in renewable energy infrastructure will take forethought and planning.
How fast can Africa catch up?
“The reality is that margins are tight, and miners across Africa will need to generate new capital if they’re to invest confidently in lower carbon solutions,” says Mervyn Stevens, Vice President – Mineral Processing and Battery Materials.
“One solution for Africa miners to increase margins is to expand further down the beneficiation stream. Currently, material passes hands several times before it gets to the component level. But compressing the supply chain is an opportunity. Other than lithium, everything travels well, and can be purified locally into high value materials and shipped to the European batteries market.”
For example, South Africa has around 70 percent of the world’s manganese. With the right investment, the country could become a leading electrolytic manganese producer.
“This idea is gaining traction, with three advanced studies for electrolytic/ high-purity manganese facilities currently underway,” says Stevens. “The same applies to electrolytic cobalt and nickel sulphate. African focused investment has been slow over the last five years, but it’s progressing quickly as miners look to supply a more beneficiated product that feeds directly into the batteries manufacturing process.
“A higher value product creates a better margin for the local producer. This producer can then use these funds to invest in renewable energy solutions, to further reduce costs over time and improve sustainability performance. We’re seeing this happen in pockets, with miners adding solar facilities to generate renewable electricity.”
How miners can add more value in supply chains
It takes multiple steps to produce battery-grade material for European manufacturers, while also meeting sustainability expectations from buyers.
“We’ve completed more than 200 projects involving graphite, nickel, manganese, vanadium, lithium and cobalt mining,” says Stevens.
“We’re helping our customers complete the intermediate processing steps to refine and convert raw materials into active materials. This includes graphite anode facilities from mining through to anode precursor, for several cathode precursor producers of Li-ion nickel manganese cobalt (NCM) material and electrolyte.
“These looming supply imbalances are an opportunity for our customers to integrate their operations, from mining through to processing anode and cathode precursor materials, so they can add more value.”
The next steps to create sustainable battery materials supply chains
As Europe pushes forward with its decarbonization plans, its relationship with Africa has never been more important as it races to build battery production capacity and secure sustainable supply chains.
“Delivering battery materials at scale means changing how resources are developed and operated,” says Bell. “It will require cooperation between governments at all levels, investors, operators, equipment suppliers, service providers, end users and communities to accelerate the development of critical minerals, while at the same time managing the needs of all stakeholders.”