As the demand for clean energy soars, so does the need for lithium to manufacture lithium-based batteries, which are essential for energy storage systems. China currently dominates global supply chains, even though it only holds 7% of the world’s lithium reserves. Africa, with its rich lithium resources, is at a critical point in its development. To become a significant player in the global lithium market, it will need to strengthen its infrastructure and address political and economic challenges.
Lithium (PTI)
China has long secured monopolies on key minerals such as cobalt, lithium and rare earth elements essential to the transition to green energy. But Western governments and international companies are beginning to challenge this dominance, and Africa, with its rich lithium resources, could play a key role in the race for lithium supremacy.
Africa is at a critical tipping point in lithium resource development, with significant reserves in Zimbabwe, Namibia, Ethiopia, Ghana, Mali and the Democratic Republic of Congo (DRC). These countries aim to expand their processing and refining industries to secure greater profits from the growing global demand for battery materials.
Africa’s lithium resources have great potential for economic growth and job creation, but establishing large-scale lithium hydroxide plants requires reliable supplies of electricity, chemicals and raw lithium. Currently, few areas in Africa can provide these necessities. Furthermore, governments need to create sufficient incentives for companies to add value domestically.
A major barrier to project development in Africa is the lack of transportation infrastructure. Some countries can process lithium domestically, but they need reliable highways to transport the product to international markets. Many operations are located far from ports, and landlocked countries face complex cross-border logistics. China is currently the largest investor in African roads and highways.
Political instability and corruption further complicate the situation. For example, the legal dispute between Australia’s AVZ Minerals and China’s Zijin Mining over the Manono concession in the Democratic Republic of the Congo highlights these challenges. Similarly, Atlantic Lithium is facing bribery charges in Ghana, while in Zimbabwe a ban on raw lithium ore exports aimed at reducing illegal mining has increased uncertainty and raised project costs.
Global market trends for lithium are unstable. Prices soared to $80,000 per ton in December 2022, but have since fallen to around $55,000, which remains well above the historical average of around $15,000. However, some Western miners are urging them to reevaluate their investments. Anticipating potential shortages, many Western countries are also considering alternatives such as sodium-ion batteries.
To become global hubs for lithium, African countries need to strengthen their cross-border infrastructure and logistics. Improved logistics will boost lithium exports, support a range of industries, including agribusiness, and create millions of jobs. But building this infrastructure requires significant investment, and only countries like China can provide it quickly. Chinese financiers are often more willing to take on riskier projects than Western development banks.
If Africa can bring lithium to market quickly, bottlenecks in the energy transition could be eased. By 2030, the continent could supply 20% of the world's lithium. Miners expect steady demand and welcome competition from Chinese companies and interest from developed countries such as Canada and Australia. Diverse and competitive markets are essential if Africa is to make the most of the lithium boom.
Former US Secretary of State Henry Kissinger once said, “If you control oil, you control the nation.” A similar argument can be made for lithium today. Africa is at a critical juncture in the development of the lithium industry, which could significantly boost Africa’s prosperity. For years, China has launched initiatives such as the Belt and Road Initiative (BRI) to ensure reliable supply chains for essential minerals such as lithium. Chinese companies are aggressively buying up African mines and building refineries for processing. For now, Africa relies on Chinese investment to grow its lithium sector, and to maximize Africa’s potential and influence the global energy transition, effective negotiations with Chinese interests are essential. has become essential. But this is a moment for Africa, and Africa must seize this opportunity. The continent should resist any external pressure and instead negotiate strategically to secure the best possible deal, regardless of the buyer.
This article was written by Sameer Bhattacharya, a doctoral scholar at Jawaharlal Nehru University and a senior fellow at Vivekananda International Foundation, New Delhi.
