By Ashraf Patel
At the dawn of the millennium there was much hope in Africa for sustainable development.
The birth of the Africa Union AU and the New Partnership for Africa Development NEPAD signalled a new ‘social contract’ for Africa, With super high commodity booms there was a moment those African nations endowed with mineral resources that were on a pathway to achieving their UN Millennium Development Goals MDGs.
Sadly, a vicious cycle of regional conflicts, civil wars, the global financial crisis of 2008-9, the collapse of WTO Doha development talks put an abrupt end to a viable African industrial development pathway, opening the gates to austerity, a new debt crisis, and new models of dependency we see today.
As the UN COP 27 climate change agreements move decisively on meeting climate change targets and implementing the national determined contributions the green energy transition is in policy vogue. Significant momentum and attracting massive investments by governments, fund managers and DFIs, together with the Fourth Industrial Revolution 4IR technologies as well as more sophisticated supply chains, these are the green new drivers.
But, new sobering reality-nightmare scenario is unfolding in that the green transition requires massive extraction in the most under-developed and unstable zones in Sub Saharan Africa.
For decades the ‘resource curse thesis’ has been subject of international development and governance discourses; the argument being that those nations endowed with valuable minerals- lithium, oil and gas diamonds, copper, gold, chromium, platinum etc.
Will Africa be trapped in the resource curse and face enduring conflicts and instability due to an array of multinational and regional forces with vested interests in these nations. The DRC, with large cobalt reserves were one of the core reasons for the regional war and instability in the 2000’s. Today, nations such as Mali, Niger, Gabon, and recently Mozambique and Uganda have come to represent these multiple resource curses due to discovery of oil and gas reserves and critical minerals.
Just Energy Transition and Resources Curse 2.0 in a 4IR era
In a recent report, the World Bank projects a potential rise of almost 500% in the extraction of minerals and metals like graphite, lithium and cobalt by 2050. This surge is expected to be driven by the expansion of technologies for generating and storing low-carbon energy. The surge in demand for these green minerals (also referred to as ‘low carbon’, ‘green’ or ‘transition’ minerals) provides new opportunities for mining jurisdictions in which they occur.
The African Energy Week AEW in Cape Town also had special focus on new critical minerals, which is the ‘new oil’ in investment circles.
In 2022, global battery demand for clean energy applications increased by two-thirds, with energy storage accounting for a growing total demand. As the average battery size for electric cars continues to increase, demand for batteries for automobiles has surpassed the growth rate of electric car sales. The EV industry has started to follow the conventional car markets’ push toward larger vehicles, putting further strain on critical mineral supply chains.
So the big question is – what is there of any value for Africa’s socio economic development?
The ‘great green contradiction’ of course It is not even noticed by mainstream media, that this new wave of critical mineral extraction will cause even more environmental damage in African nations, yet it is this silver bullet technology needed for the green energy transition to electric mobility and renewable technologies such as windmills and solar panels that is being celebrated and promoted. Will we be able to avoid the dire contradictions and conflicts arising from mode of extraction?
The Global North G7’s countless donor funded programs to the AU have also generally failed central Africa and nation states and locales such as Eastern DRC, Mali, Niger, Chad, Northern Mozambique For instance, a key component of the NEPAD program has been the Africa Peer Review Mechanism APRM has had resource governance framework, yet these have little impact in the local political economy which is extractive, conflictual and brutal.
Another complication if geopolitics. New sanctions on critical minerals being a new tool that inadvertently causing more economic hardship for the Global South and Africa. With bans on chips to China; and the recent G7 attempt at sanctions on Russian diamond exports shall have an unintended negative effect of fuelling and deepening contestations and fractured
governance regimes on minerals and supply chains. As BRICS nations grow and trade deepens, there is much scope for industrialisation and beneficiation of minerals for African nations, Diamonds can be cut, polished and distributed globally, and various green minerals can be beneficiated as part of solid industrial programs. These can be a boom for SME sector and African beneficiation and entrepreneurship.
Sadly, the very same ‘political economy’ still exists in Sub-Saharan Africa now as it did two decades ago - weak governance, ethnic strife, lack of state and taxation capacity, weak systems of innovation etc. Atop of these local challenges Sub Saharan Africa faces a super high debt repayments in fractured geopolitical order that is reproducing itself on the African continent. These conditions mean that the era of this new ‘critical mineral boom ’will simply lead to more ‘’resource curse conflicts’.
And G7 type global governance standards move very slowly. For instance it took the G20 over decade to agree on a global base tax regime for multinationals; and the Extractive Industries Transparency Initiative EITI have had sub optimal impacts at national-local levels, meaning that for the North and Multinationals, it is ‘business as usual’ amidst a climate emergency.
The Developing South and African nations are again at the centre of new global contestations for critical minerals Today Sub Saharan Africa faces multiple headwinds- from
the high inflation food and fuel as well as climate emergencies. As the world moves towards a new just green transition and development and diffusion of new green technologies is again putting African mineral endowments under back on the global radar for extractives and value extraction, posing major conflict risk for local communities and undermining political stability
Weaponisation of critical minerals constraining development in Global South
Another complication is that in a highly fractured world and current Ukraine -Russia conflict where trade in commodities - agriculture and now critical minerals are weaponised, having grave implications for the Developing South. By trying to ban Russian diamond sales to G7 nations etc, it open ups a pandora’s box. What then will the argument be for banning cobalt and lithium because of environmental destructive extractive practices? How does global regulation apply, and to whom? What are the boundaries and jurisdictions? For instance banning of Russian diamonds will impact negatively on the Global South and Africa, and tens of thousands of SMMEs that make livelihoods from diamond cutting and distribution, as emerging markets and burgeoning young populations are the new engines of growth.
Africa and Global South and BRICS nations offer huge market for intra-continental trade and innovation, and sustainable investment in favourable terms within a Green Industrialisation pathway. At the BRICS energy ministers committed to exchanging best practices and standards regarding the development and beneficiation of minerals in the country of origin. Delegates also agreed to explore technologies for their energy transitions and carbon reduction.
It is thus important that a rules-based trade and fair trade as envisaged by the WTO, UNCTAD and G77 Plus nations are articulated and implemented. Hence a new model rooted in industrial development and beneficiation of minerals, and resource governance, in line with the AU and UNECA reports on industrialising, and strengthening regional value chains first, before being exported as raw commodities.
Nothing short of a new social contract is required; one that takes cognisance of the UN Right to Development RfD framework as approved by the UN General Assembly, and UN COP 27 processes equally in order for sustainable development to be realised in Africa.
*Ashraf Patel is a senior research associate at the Institute for Global Dialogue.