At the dawn of the millennium there was much hope in Africa in sustainable development, the birth of the Africa Union (AU) and the New Partnership for Africa Development (NEPAD) signalled a new ‘social contract’ for Africa. With super high commodity booms there was a moment those African nations endowed with mineral resources were on a pathway to achieving their UN Millenium Development Goals (MDGs). Sadly, a vicious cycle of regional conflicts, civil wars, and the global financial crisis of 2008-9, the collapse of the WTO Doha development talks put an abrupt end to a viable African industrial development pathway, opening the gates to austerity, a new debt crisis, and new models of dependency we see today.
As the UN COP 27 climate change agreements move decisively on meeting climate change targets and implementing the national determined contributions, the green energy transition is in policy vogue. With significant momentum and attracting massive investments by governments, fund managers and DFIs, together with the Fourth Industrial Revolution (4IR) technologies as well as more sophisticated supply chains, these are the green new drivers. However, a new sobering reality-nightmare scenario is unfolding in that the green transition requires massive extraction in the most under-developed and unstable zones in Sub-Saharan Africa.
For decades the ‘resource curse thesis has been subject of international development and governance discourses; the argument being that those nations endowed with valuable minerals- lithium, oil and gas, diamonds, copper, gold, chromium, platinum were locked into a cycle of underdevelopment, especially with sectors falling outside of the extraction of their natural resources most affected.
Will Africa be trapped in the resource curse and face enduring conflicts and instability due to an array of multinational and regional forces with vested interests in these nations. The DRC is case in point, with large cobalt reserves being one of the core reasons for the regional war and instability in the 2000’s. Today, nations such as Mali, Niger, Gabon, and recently Mozambique and Uganda have come to represent these multiple resource curses due to discovery of oil and gas reserves and critical minerals.
Just Energy Transition and Resources Curse 2.0 in a 4IR era
In a recent report, the World Bank projects a potential rise of almost 500% in the extraction of minerals and metals like graphite, lithium and cobalt by 2050. This surge is expected to be driven by the expansion of technologies for generating and storing low-carbon energy. The surge in demand for these green minerals (also referred to as ‘low carbon’, ‘green’ or ‘transition’ minerals) provides new opportunities for mining jurisdictions in which they occur. The African Energy Week AEW in Cape Town also had special focus on new critical minerals, which is the ‘new oil’ in investment circles.
In 2022, global battery demand for clean energy applications increased by two-thirds, with energy storage accounting for a growing total demand. As the average battery size for electric cars continues to increase, demand for batteries for automobiles has surpassed the growth rate of electric car sales. The EV industry has started to follow the conventional car markets’ push toward larger vehicles, putting further strain on critical mineral supply chains. So the big question is – what is there of any value for Africa’s socio economic development?
The ‘great green contradiction’ of course is not even noticed by mainstream media, that this new wave of critical mineral extraction will cause even more environmental damage in African nations, yet it is this silver bullet technology needed for the green energy transition to electric mobility and renewable technologies such as windmills and solar panels that is being celebrated and promoted. Will we be able to avoid the dire contradictions and conflicts arising from this mode of extraction?
The Global North G7’s countless donor funded programs to the AU have also generally failed central Africa and nation states and locales such as Eastern DRC, Mali, Niger, Chad, and Northern Mozambique. For instance, a key component of the NEPAD program has been the African Peer Review Mechanism’s (APRM) resource governance framework, yet these have little impact in the local political economy which is extractive, conflictual and brutal.
Another complication is geopolitics. New sanctions on critical minerals being a new tool that inadvertently causes more economic hardship for the Global South and Africa. Bans on chips to China; and the recent G7 attempt at sanctions on Russian diamond exports shall have an unintended negative effect of fuelling and deepening contestations and fractured governance regimes on minerals and supply chains. As BRICS nations grow and trade deepens, there is much scope for industrialisation and beneficiation of minerals for African nations. Diamonds can be cut, polished and distributed globally, and various green minerals can be beneficiated as part of solid industrial programs. These can be a boom for the SME sector and African beneficiation and entrepreneurship.
Sadly, the very same ‘political economy’ still exists in Sub-Saharan Africa now as it did two decades ago – weak governance, ethnic strife, lack of state and taxation capacity, and weak systems of innovation. Atop of these local challenges Sub-Saharan Africa faces high debt repayments in a fractured geopolitical order that is reproducing itself on the African continent. These conditions mean that the era of this new ‘critical mineral boom ’will simply lead to more ‘’resource curse conflicts’.
It is also important to note that G7 type global governance standards move very slowly. For instance, it took the G20 over a decade to agree on a global base tax regime for multinationals; and the Extractive Industries Transparency Initiative (EITI) has had sub optimal impacts at national-local levels, meaning that for the North and Multinationals, it is ‘business as usual’ amidst a climate emergency.
The Developing South and African nations are again at the centre of new global contestations for critical minerals at a time when Sub-Saharan Africa faces multiple headwinds – from the high inflation on food and fuel, as well as climate emergencies. As the world moves towards a new just green transition and development pathway, the diffusion of new green technologies is again putting African mineral endowments back on the global radar for extractives and value extraction, posing major conflict risk for local communities and undermining political stability.
Weaponisation of critical minerals constraining development in the Global South
Another complication is that in a highly fractured world and current Ukraine – Russia conflict, trade in commodities – agriculture and now critical minerals is weaponised, having grave implications for the developing South. By trying to ban Russian diamond sales to G7 nations, it opens up a pandora’s box. What then will the argument be for banning cobalt and lithium, will it be because of environmental destructive extractive practices? How does global regulation apply, and to whom? What are the boundaries and jurisdictions? For instance, banning of Russian diamonds will impact negatively on the Global South and Africa, and tens of thousands of SMMEs that make livelihoods from diamond cutting and distribution, as emerging markets and burgeoning young populations are the new engines of growth.
Africa, the Global South and BRICS nations offer a huge market for intra-continental trade and innovation, and sustainable investment on favourable terms within a Green Industrialisation pathway. The BRICS energy ministers committed to exchanging best practices and standards regarding the development and beneficiation of minerals in the country of origin. Delegates also agreed to explore technologies for their energy transitions and carbon reduction.
It is thus important that a rules-based trade and fair trade as envisaged by the WTO, UNCTAD and G77 Plus nations are articulated and implemented. Hence a new model rooted in industrial development and beneficiation of minerals, and resource governance, in line with the AU and UNECA reports on industrialising, and strengthening regional value chains first, before being exported as raw commodities will be important going forward.
Nothing short of a new social contract is required; one that takes cognisance of the UN Right to Development (RfD) framework as approved by the UN General Assembly, and UN COP 27 processes equally in order for sustainable development to be realised in Africa.
Mr. Ashraf Patel is the digital data and economy associate at the IGD. His research is also supported by the National Institute for Humanities and Social Sciences (NIHSS) and the South African BRICS Think Tank (SABTT). Mr. Patel’s views do not necessarily reflect those of the IGD