Moderator:
Theo Acheampong, Critical Minerals Africa Group
Speakers:
- Glen Nwaila, Associate Professor of Geometallurgy and Machine Learning, School of Geosciences, University of the Witwatersrand
- Mark Burnett, Principal Geologist, AMC Consultants
- David Rhodes, Managing Director, Endeavour Financial
The discussion centred on a fundamental tension shaping Africa's role in global mineral supply chains: despite vast endowments of critical minerals, the continent remains largely positioned at the extraction stage, capturing only a fraction of the potential value. Panellists approached this challenge from complementary angles—technical, financial, and policy—interrogating not just why value addition has proven elusive, but what it would realistically take to move beyond it.
A key theme throughout was the need to move past overly simplified narratives. Value addition is often framed as a singular leap—towards battery manufacturing or advanced industrialisation—but the discussion instead emphasised it as a multi-stage, interdependent system. This system spans mining, processing, refining, manufacturing, services, and knowledge development, each with its own requirements and constraints. The conversation therefore focused less on aspiration, and more on identifying the structural barriers that continue to anchor African economies at the lower end of the value chain.
Key Barriers to Moving Beyond Extraction
- Infrastructure Deficits (Power, Transport, Water, Inputs)
- Processing and refining require continuous, reliable, and cheap power—often unavailable or unstable.
- Weak transport and logistics networks increase costs and reduce competitiveness.
- Limited access to water and chemical inputs, often requiring costly imports.
- Exporting raw materials remains simpler and more economical than local processing.
- Scale and Feedstock Constraints
- Downstream facilities require large, consistent volumes from multiple mines.
- Deposits are often geologically complex and fragmented, complicating aggregation.
- Lack of coordination leads to uncertain long-term feedstock supply, deterring investment.
- Capital Intensity and Investment Risk
- Processing plants require billions in capital with long payback periods (10–15+ years).
- High perceived risk due to policy uncertainty and infrastructure gaps.
- Many projects fail because critical components are missing (e.g. power, inputs, logistics).
- Policy Instability and Short-Termism
- Inconsistent and unpredictable policies undermine investor confidence.
- Export bans are often implemented without supporting industrial capacity.
- Lack of long-term, coherent industrial strategies aligned across political cycles.
- Fragmentation vs. Regional Coordination
- Countries pursue national beneficiation strategies in isolation.
- Weak intra-African trade integration (currencies, standards, logistics).
- Competition over hosting infrastructure limits collaborative value chains.
- Skills Gap and Human Capital Constraints
- Shortage of technical and engineering expertise for downstream industries.
- Education systems lack industry-linked STEM training.
- Persistent brain drain reduces domestic capacity.
- Low Investment in R&D and Innovation
- R&D spending remains below 1% of GDP, limiting innovation.
- Weak collaboration between universities, industry, and government.
- Limited capability to develop locally appropriate processing technologies.
- Misalignment Between "Value" and "Returns"
- Governments focus on societal value (jobs, industrialisation).
- Investors prioritise financial returns and risk.
- Lack of alignment creates friction in project development and financing.
- Trust Deficit Across Stakeholders
- Historical tensions create mutual distrust between governments, investors, and communities.
- Concerns over policy reversals, value capture, and local benefit sharing.
- Reduces willingness to commit long-term capital.
- Limited Domestic Capital Mobilisation
- Heavy reliance on foreign direct investment.
- Domestic capital (e.g. pensions) is not structured for high-risk early-stage investment.
- Limited use of sovereign or strategic investment vehicles.
- Global Competitive Pressure
- Established players dominate processing and refining capacity.
- Benefit from scale, long-term investment, and state support.
- New entrants face significant barriers to entry.
- Lack of Integrated Industrial Planning
- Disconnect between resource endowment, policy, and industrial strategy.
- Overestimation or poor understanding of mineral potential.
- Absence of clear sequencing across the value chain.
- Logistics and Market Access Challenges
- Poor intra-African connectivity increases reliance on external trade routes.
- Infrastructure designed for exports, not regional integration.
- High logistics costs reduce competitiveness of processed goods.
- Energy Reliability as a Binding Constraint
- Processing requires uninterrupted energy supply.
- Power instability has led to industrial decline in some regions.
- Limits feasibility of energy-intensive downstream industries.
- Capability Gaps in Complex Processing
- Critical minerals often require technically complex and hazardous processing.
- Limited local experience in advanced refining and battery materials.
- Gap between theoretical knowledge and industrial execution.
Value addition is not a single intervention but a system-wide transformation requiring alignment across policy, infrastructure, finance, skills, and technology. It demands regional cooperation, long-term thinking, and credible execution. While the barriers are significant—ranging from capital intensity to geopolitical competition—the discussion also highlighted areas of agency, particularly in improving coordination, investing in human capital, and leveraging emerging technologies.
"Value addition in Africa should look like converting mineral wealth into industrial capability."
The challenge lies not in defining this ambition, but in building the complex, coordinated systems required to realise it.
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