Africa will have to make difficult trade-offs between economy and ecology to exploit its rare earths (report)
The report highlights that rare earths are at the heart of an environmental paradox.
These minerals are essential for the energy transition and the decarbonization of the economy, but their extraction process is very harmful to the environment.
As the West looks to Africa to secure its supply of rare earths and reduce its dependence on China, countries on the continent are being called upon to make painful trade-offs between economic stakes and environmental dangers.
linked to the exploitation of these essential minerals for the manufacture of key technologies for the energy transition and electronic devices, according to a report published last June by Ecofin Pro, the platform of the Ecofin agency dedicated to professionals in several sectors .
Entitled "Rare earths in Africa: opportunities, but also environmental risks", the report recalls that rare earths are a group of 17 chemically related elements in mineral form, including scandium, yttrium and the fifteen lanthanides (including including neodymium and praseodymium).
These metals have magnetic and optical properties essential for the manufacture of electric cars, photovoltaic panels and wind turbines.
They are also found in smartphone chips, laptop screens, stadium scoreboards, robotics, aeronautics, medical lasers, radar sensors, sonars and weapons.
Contrary to what their name may suggest, rare earths are quite widespread in many countries.
In reality, their “supposed” rarity is due to the fact that few nations outside of China have agreed to pay the rather high environmental cost associated with their exploitation.
Given the wide spectrum of industrial applications of these minerals, their demand is set to grow in the years to come.
Even if some manufacturers are trying to substitute rare earths with other metals, demand from the automotive industry sector should not weaken at least until 2030.
It will be the same for the other sectors.
With a 60% share of global supply, China is currently the main producer of rare earths.
To break Chinese domination, the West sets its sights on Africa
China's dominance of much of the mineral value chain has already caused geopolitical tensions.
In 2010, a territorial dispute between China and Japan had already prompted Beijing to decree an embargo on rare earth exports to Tokyo.
In 2019, the Middle Kingdom threatened to deprive the United States of its rare earths, in retaliation for Washington's decision to ban American companies from supplying their technologies to Chinese telecommunications giant Huawei.
In addition, China had introduced export quotas to “protect its resources threatened with depletion”.
The United States, the European Union and Japan retaliated by taking the case to the World Trade Organization (WTO) which ruled in their favor in 2015.
Production of rare earths in the world from 1960 to 2012
After becoming aware of their vulnerability to China, Western countries began to look for other alternatives to the Chinese supply to ensure a more diversified, secure and sustainable supply of rare earths.
Africa has become the main destination for Western companies, but also Chinese companies wishing to position themselves on new projects.
The report drawn up by our colleague Louis-Nino Kansoun specifies in this context that several countries on the continent have large reserves of rare earths, which have been very little exploited to date.
The first (and currently only) rare earth mine on the continent went into production in 2017 in Burundi.
This small East African country has teamed up with the British mining company Rainbow Rare Earth (RRE) on the Gakara project, which hosts a resource of around 1.2 million tonnes of minerals.
Several countries are preparing to join him in the closed circle of producers, outside of China.
In Angola, the State is pinning great hopes on the Longonjo deposit, the exploration and exploitation of which has been entrusted to the British company Pensana.
The latter plans to produce 60,000 tonnes of rare earth concentrate annually over nine years.
In Tanzania, Peak Rare Earths, a company 19.9% owned by China's Shenghe Resources, is active on the Ngualla rare earths project.
Eight other African countries (Kenya, Uganda, Mozambique, Namibia, Malawi, South Africa, Madagascar, Ivory Coast) are also preparing to operate rare earth mines.
The examination of the various African projects reveals a battle that is taking shape between the West and China, even if Western companies seem to dominate for the moment.
An extraction process that is very harmful to the environment
The report also underlines that rare earths are at the heart of an environmental paradox.
They are necessary for the energy transition, but their extraction process is very harmful to the environment.
Rare earths pollute mainly because of their chemical properties.
These metals are concentrated together in the deposits, which involves a separation step after extraction in order to use them individually, but the separation process requires different operations that lead to polluting discharges.
On the other hand, the rare earth contents of the deposits are extremely low (1% to 5%) which means that mining companies are forced to extract a large quantity of rock to extract a small quantity of rare earths at the end of the process.
The extraction of these ores, which also have an ionic radius close to those of radioactive elements such as uranium and thorium, also has negative impacts on vegetation, soils and water.
But for African countries hosting rare earth resources, the challenge is to take advantage of opportunities to boost local economies.
In this regard, the case of Angola is very revealing.
The country has put in place various mechanisms to take full advantage of the exploitation of these minerals.
In addition to granting Pensana an operating permit of unusual duration in the mining sector (35 years renewable), the Angolan sovereign wealth fund took a 23.1% stake in the project.
The mining contract concluded between the two parties also provides for 2% royalties to be paid to the State on the revenues of the mine as well as a national tax of 20% and a municipal tax of 5% on the revenues, after two years of 'tax exemption.
For its part, Burundi suspended in 2021 the activities of several companies, including Rainbow Rare Earths, in order to renegotiate the contracts concluded with the mining companies active on its soil.
In this frantic search for revenue, African countries would benefit from putting more emphasis on how foreign companies manage environmental risks.
But as past experiences show, African states that have found themselves forced to make these sorts of trade-offs have often chosen revenue for the economy over environmental impact.
This problem is also one of the factors mentioned when it comes to talking about the curse of natural resources that plagues the continent.
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