Ghana is taking steps to fulfil its ambitions of becoming a battery production hub, showing the potential for other African countries to add more value to their critical minerals before export. 

In October 2023, the Ghanaian government granted Australia-based Atlantic Lithium a licence to mine lithium in the southern township of Ewoyaa. 

A few weeks later, ReElement Technologies — a US-based subsidiary of the American Resources Corporation which is developing lithium-refining technology — announced plans to build a $200m facility in Tema, the country’s largest port. 

The initial capacity will be 30,000 tonnes of battery-grade lithium carbonate per year, with potential for expansion. Construction will start in the coming months, with completion targeted in early 2025. 

“We believe that Ghana has created a safe operating environment and is working to further roll out its critical mineral strategy and concessions,” says the CEO of ReElement Technologies, Mark Jensen. 

Mr Jensen has a previous career as a mining clean-up specialist in eastern Kentucky in the US. He sought to produce concentrates from coal waste, as an alternative to shipping them off to China. In 2021, ReElement, then called American Rare Earth, partnered with Purdue University in the US to develop rare earth and critical materials separation and purification technologies.

As they wait for Atlantic Lithium’s mine to come online, ReElement and its local partner Techgulf are planning to import lithium feedstock from Nigeria, Senegal and Rwanda. 

Talks are also underway with South African battery producer Afrivolt, which is exploring plans for a local battery production facility, to secure a local offtake agreement and possibly increase the planned investment to $600m, a local source confirms. Offtake agreements in Europe are being explored too.

Seeking stability 

Global need for critical minerals, and the need to diversify supply chains away from China, is prompting African governments to seek domestic refining capacity.

In keeping with non-African developing countries, Ghana, Namibia and Zimbabwe have banned raw lithium exports, while Tanzania plans to do so from May.

Africa has about 85% of the world’s manganese, 80% of its platinum and chromium, 47% of its cobalt, 21% of its graphite and 6% of its copper, according to the Center for Strategic and International Studies (CSIS) in Washington DC. It accounts for only 4% of the world’s known lithium, but new reserves are expected to be found, which would lift that to around 12% over the next decade, according to CSIS. However, the continent’s exploration budget languishes at roughly half that of Latin America, Australia and Canada, CSIS research shows. 

The trend towards more in-country refining is “an opportunity for governments to claw back value”, adds John Sisay, CEO of Ongopolo Mining and Processing in Namibia. “Governments will prioritise companies that give them that commitment.”

Ongopolo’s copper mine in Namibia closed in 2021, in order to save the cash needed for further drilling to extend the mine’s life. It has an on-site refining plant that can produce copper cathode to the standards of the London Metal Exchange — one of the largest commodities exchanges in the world — Mr Sisay says. Further drilling has extended the mine’s remaining lifespan from three to at least eight years, and Mr Sisay aims to restart production in the first half of this year. 

Botswana and Namibia offer more stable jurisdictions than many in west Africa, which has been hit by increased terrorism and a spate of military coups in recent years, Mr Sisay explains, describing stability in southern and western Africa as “chalk and cheese”. While energy generation problems in South Africa are a constraint for the region, road connections between Botswana and Namibia are also better than those in many west African countries.  

Bargaining power

The need to reduce China’s dominance of critical minerals supply chains means that “Africa now has a degree of bargaining power”, says Gracelin Baskaran, a mining economist at the CSIS in Washington DC. 

The West, Ms Baskaran says, has lagged behind China in securing access to critical minerals. China, she argues, has shown itself to be willing to lose money in order to ensure control over cobalt supplies from the Democratic Republic of Congo. Lack of a consistent US approach to commercial diplomacy has contributed to current Chinese dominance, she adds. 

There is particular urgency in rare earths, where the US controls only about 1.2% of global supply, according to Ms Baskaran, and has been unable to replicate Chinese solvent extraction processes. “The US fell asleep on mining,” she explains. “Western governments are now starting to understand they have to take some of the risk.”

It will not be economically viable to create processing capacity in each African country imposing limitations on mineral exports. Infrastructural improvements will be needed, as lithium processing, for example, is intensive in terms of both water and energy. And despite the adoption of the African Continental Free Trade Area, trade barriers remain.

Foreign investors have announced 22 projects related to the processing of critical minerals across Africa since 2016, according to greenfield foreign direct investment monitor fDi Markets. 

Among others, Swiss community trading powerhouse Trafigura is developing a copper and cobalt processing plant at the Mutoshi mine in the Democratic Republic of Congo; Chinese Jiangxi Ganfeng Lithium is building a lithium processing plant in the state of Nasarawa, Nigeria; and British Andrada Mining is planning a new concentrated lithium plant in Namibia.

“Regional co-operation has not been very good,” adds Ms Baskaran, who sees an ongoing risk of African “resource nationalism”. 

African countries must now choose which commodities offer the most realistic processing possibilities, co-operate to establish regional facilities and work on supporting infrastructural improvements, she says.  

David Whitehouse is a freelance journalist in Paris and editor-at-large of The Africa Report.

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This article first appeared in the December 2023/January 2024 print edition of fDi Intelligence