Global Shifts in Battery Manufacturing: Africa’s Role in the Future of Clean Energy

As the demand for electric vehicles (EVs) and renewable energy storage soars, global battery supply chains are rapidly evolving. With the United States and European Union seeking to reduce dependence on Chinese battery supplies, Africa’s resource-rich landscape offers a unique opportunity to become a vital player in the global battery manufacturing ecosystem. Thanks to abundant deposits of essential minerals like lithium, nickel, manganese, and copper, Africa stands poised to transition from an exporter of raw materials to a competitive producer of high-value battery components.

Recent research by the UK’s Manufacturing Africa program and the Faraday Institution underscores Africa’s cost advantage in refining these resources. Estimates suggest that Africa-based refining could achieve a cost advantage of up to 40% over global peers by 2030. By scaling up its battery production capabilities, Africa has the potential to meet a growing share of the global demand, projected to reach 7.8 TWh by 2035. However, for Africa to become a significant global supplier, achieving economies of scale with production capacities of 10-15 GWh per Gigafactory will be essential.

Key Opportunities in Africa’s Battery Manufacturing Value Chain

Refining: Unlocking Cost Competitiveness

Africa’s rich deposits of battery minerals provide a strong foundation for refining activities. Integrated refineries can benefit from direct access to raw materials, making them highly competitive globally:

• Lithium: Africa-based lithium refineries could enjoy a 35-40% cost advantage compared to those in China, the US, and Australia. A well-placed lithium refinery could generate annual revenues of approximately USD 0.4 billion, creating 100-300 jobs.
• Nickel: African nickel refineries leveraging local high-quality deposits could reduce costs by 10-15% compared to other markets, potentially generating USD 2.3 billion annually and creating 1,200-1,400 jobs.
• Manganese and Copper: Integrated African manganese refineries could operate at 10-15% lower costs than China’s, with copper refineries achieving up to a 25-30% cost advantage. These operations could collectively contribute billions in revenue and create significant local employment.

Battery Cell Manufacturing: Accessing Global Markets

Countries like Tanzania and Morocco could achieve cost-competitive battery production. For instance, under favorable conditions, Morocco could produce lithium iron phosphate (LFP) batteries for $72/kWh, closely competing with subsidized European rates. Key enablers such as favorable trade agreements with Europe, subsidy programs, and the establishment of Special Economic Zones (SEZs) will be vital for African manufacturers aiming to serve international markets.

Battery Pack Assembly: Building Local Capabilities

Some East and West African firms are already assembling battery packs for local EV markets and off-grid solar applications. By further investing in local cell manufacturing, Africa could meet both domestic and export demands for battery packs, leveraging the cost advantage of proximity to raw materials and reducing logistics costs.

Environmental Considerations and Recycling

A critical component of Africa’s battery manufacturing journey will involve addressing the environmental impact of battery production and disposal. Effective recycling strategies will be essential to mitigate potential waste and pollution issues associated with battery materials. Partnering with international technology providers, African nations could adopt modular recycling solutions that manage battery waste sustainably and create a closed-loop manufacturing ecosystem.

Conclusion

Africa’s abundant resources and strategic position offer a compelling case for its emergence as a leader in the global battery market. Through cross-continental collaboration, investment in advanced infrastructure, and the implementation of supportive policies, African countries have the potential to capitalize on this opportunity and foster a sustainable, competitive battery manufacturing industry. With the right investments in technology and workforce development, Africa can contribute significantly to the global shift toward clean energy while driving economic growth across the continent.