A study conducted by the United Nations Economic Commission for Africa shows that the demand for essential minerals will drive the decarbonization of economies and achieve net-zero emissions by 2050. Africa could become an ideal destination for industrialization by adding value to the continent’s essential minerals. Africa’s commitment to trade-focused economic integration should be leveraged to support the development of regional and continental mineral-based value chains and economic diversification.

Implementing effective trade policies on essential minerals

Africa, rich in essential minerals, is accelerating intercontinental trade. The continent is also exploiting its natural resources for sustainable development by deploying effective trade policies. The goal is to benefit from the global rush towards green energy transition.

Africa holds about 30% of the world’s mineral reserves, including cobalt, lithium, and nickel, which are considered essential for the green transition. African countries need to harness these resources to drive their development, particularly trade and industrialization, experts say.

A meeting of experts on Africa’s essential minerals in the context of trade policy was organized by the African Trade Policy Centre (ATPC) on December 16-17, 2024, in Addis Ababa. Africa already has appropriate strategies and policies to exploit its mineral resources. However, what is lacking is deliberate action to harness this potential, as the continent risks losing all the benefits of these essential minerals to global investors.

Speaking at the EGM’s opening, ECA Deputy Executive Secretary Antonio Pedro emphasized that it is time for Africa to leverage its political and economic integration for its development. The continent already has policies aimed at promoting the development of its mineral resources.

“There is no reason for us to witness a repetition of the rush to Africa, especially at a time when greater political and economic integration has also taken place at regional and continental levels,” said Mr. Pedro. He also highlighted that continent-wide support policies such as the African Mining Vision (AMV), the African Commodity Strategy, and now the African Green Minerals Strategy have been adopted throughout Africa.

Critical minerals : Revenue generator

Research conducted by the ECA shows that the demand for essential minerals will drive the decarbonization of economies and achieve net-zero emissions by 2050. The transition from fossil fuels to clean energy will create a demand for three billion tons of minerals and metals to deploy solar, wind, and geothermal energy by 2050. For example, the Democratic Republic of Congo alone supplies about 70 % of the world’s cobalt market, an essential mineral for electric vehicle batteries.

Critical minerals sought for an equitable energy transition could fuel Africa’s development and sustainable future, according to the United Nations Conference on Trade and Development (UNCTAD). The organization identifies critical minerals as a key revenue generator, enabling governments to fund development and lift millions of Africans out of poverty.

Essential minerals to boost electric mobility in Africa

Africa could become a prime destination for industrialization by adding value to essential minerals. Adding value to essential minerals could boost electric mobility in Africa, create decent jobs, and make Africa a competitive hub for green industrialization.

Africa is home to significant reserves of essential minerals for the energy transition, including 55 % of cobalt, 47.65 % of manganese, 21.6 % of natural graphite, 5.9 % of copper, 5.6 % of nickel, 1 % of lithium, and 0.6 % of iron ore globally, according to UNCTAD.

Research shows that Africa has not yet fully exploited the potential of its mineral resources. In fact, African countries generate only about 40% of the revenue they could potentially derive from these resources.

The growing global demand for critical minerals presents an opportunity for Africa to :

• Maximize revenue from mining
• Develop regional value chains

This can be achieved by leveraging Africa’s trade and integration agenda, particularly its regional economic communities (RECs) and the African Continental Free Trade Area (AfCFTA). The AfCFTA represents a market of 1.3 billion people and a combined GDP of over USD 3.4 trillion, while intra-African trade accounts for only 15% of the continent’s total trade.

Demand for Critical Minerals

The EGM examined the current demand for critical minerals in the broader historical and intellectual context of commodity dependence. The organization reviewed Africa’s recent experiences in the commodity sector and explored the role of Africa’s trade and integration policy. The vision is to safeguard Africa’s internal interests and strengthen its bargaining power in relations with external partners.

The EGM, which included panels led by prominent experts and researchers from the African Union Commission, United Nations agencies, regional development banks, think tanks, and the private sector, made several actionable recommendations.

It recommended that Africa’s commitment to trade-focused economic integration be leveraged to support the development of regional and continental mineral-based value chains and economic diversification.

Additionally, meeting participants called for further research to inform concrete policy recommendations. It was agreed to conduct a baseline study to understand how African minerals are used and traded today and what lessons Africa can learn from its own experiences with past commodity booms and busts.