Running discussion on SP, page-66793

Just the beginning for DRC to create jobs in EV industry and AVZ will be a major part of the transition.
Brilliant deal by management to have CATH as a major shareholder and buyers from CATH connections for the life of the mine.

Battery production in the DRC could be gamechanger



ByGuest Contributor
Nov 29, 2021

www.123rf.com
The Democratic Republic of the Congo could leverage its abundant cobalt resources and hydroelectric power to become a low-cost, low-emissions producer of lithium-ion battery cathode precursor materials.
A study by BloombergNEF, on a unified African supply chain, estimates it would cost $39million to build a 10,000 metric-ton cathode precursor plant in the DRC. This would be three times cheaper than what a similar plant in the US would cost.
The same kind of plant in China and Poland would cost $112m and $65m respectively. Precursor material produced at plants in the DRC could be cost-competitive with material produced in China and Poland but the important difference is with a lower environmental footprint.

RELATED:
Copper/cobalt: Deficits to drive healthy prices, but only from 2025
Emissions associated with battery production could be cut by 30% compared with the existing supply chain that runs through China. That is if cathode precursor materials (the intermediate material between raw and finished cathode material) were produced in the DRC, with Poland handling the production of cathode materials and cells, and Germany the final pack assembly.
This is because of the DRC’s proximity to cathode raw materials and heavy reliance on hydroelectric power plants.

Taking advantage of the sheer size of the future EV market

Kwasi Ampofu, report lead author and BNEF head of metals and mining said the DRC’s cost competitiveness comes from its relatively cheap access to land and low engineering, procurement and construction (EPC) cost compared to the US, Poland and China.
“European cell manufacturers currently rely heavily on China for battery precursors. However, the raw materials for batteries are, in most cases, imported into China from Africa and refined before being exported to Europe. Automakers in Europe can lower their emissions by shortening the transport distance and capitalising on the DRC’s hydroelectric powered grid and proximity to raw materials,” explained Ampofu.
Have you read?
Demand for electric vehicle batteries expected to surge
Electric vehicles represent a $7 trillion market opportunity between today and 2030 and $46 trillion between today and 2050, according to the new report, The Cost of Producing Battery Precursors in the DRC, launched at the DRC-Africa Business Forum 2021.
While there are notable leading electric vehicle and cell manufacturers today, the sheer scale of growth expected in the coming decades means there is inherent uncertainty over which companies and countries may come to dominate this new value chain. African countries could play a major role in the lithium-ion battery supply chain by taking advantage of their abundant natural resources and onshoring more of the value chain.
Successfully creating a battery production line in Africa means creating local supply and demand

James Frith, head of energy storage at BNEF pointed out that for regions to successfully attract battery components or cell manufacturing they need to have either a supply of key raw materials or local demand for batteries. “If they have access to raw materials, they can use this supply to attract downstream manufacturers. If they have local demand for batteries cell manufacturers will move to the region to be close to their customers, particularly in the automotive industry. Africa has a wealth of critical battery raw materials and is in a position to use these to attract more value-add in downstream processing and manufacturing.”
The African Continental Free Trade Area agreement has the potential to create the largest free trade area in the world. If approached correctly, African countries can capitalise on their abundant natural resources, growing demand for vehicles and rapid urbanisation to build a global hub to produce electric vehicles and perhaps even battery production.
Ashish Sethia, BNEF global head of commodities said we are only at the beginning of the path to achieving net-zero emissions globally. “Emerging economies in Africa can gain significant long-term economic value by quickly setting up projects that support the low-carbon transition with transparent governance frameworks.”
Providing energy for potential manufacturing in DRC needs reliable power supply

Vera Songwe, UN under-secretary-general and executive secretary of the UN’s Economic Commission for Africa pointed out the DRC produces about 70% of global cobalt but has only captured 3% of the battery and electric vehicle chain. “With a functioning AfCFTA, the DRC can receive other upstream mineral inputs needed for lithium-ion batteries – such as manganese from, say, South Africa and Madagascar, copper from Zambia, graphite from Mozambique and Tanzania, phosphate from Morocco, and lithium from Zimbabwe, to name but a few.”
“The DRC can truly become the regional and global centre of gravity for the production of precursor materials for batteries to drive the fourth industrial revolution. In so doing, the country and the rest of Africa can extend their access from the $271 billion battery precursor segment to the more lucrative $1.4 trillion combined battery cell production and cell assembly segments of the battery minerals global value chain.
“This requires plenty of reliable and affordable power, which can be achieved by connecting Africa’s power systems with the Grand Inga at the core and with wind and solar power from North African countries, the Sahel and South Africa, geothermal from East Africa, hydro from Central and West Africa.
“But, to reap these benefits, African leaders must make the commitment to facilitate the needed investments and make the AfCFTA deliver for the continent,” said Songwe.
Oliver Pognon, director and CEO of ALSF: “The study confirms the cost competitiveness of establishing a battery precursor industry in the DRC based on local mineral resources. For the Africa Legal Support Facility (ALSF), such information is valuable for negotiating fair and equitable contracts that ensure that Africa retains the maximum value from her mineral resources, while also contributing to the global energy transition.”
The Cost of Producing Battery Precursors in the DRC is publicly available online.

• TAGS
• African Continental Free Trade Area
• cobalt
• DRC
• electric vehicles
• lithium ion batteries

ALL IMO