The private sector, politicians, regional institutions, and financial partners are rallying behind Africa’s first electric battery manufacturing initiative taking shape in the Democratic Republic of Congo.
Participants to a recent forum dubbed “Africa-DRC Business Forum” showed a lot of enthusiasm in the project.
The enthusiasm is borne out of a recent study carried out by Bloomberg that proved that manufacturing electric car batteries in the DRC could basically quadruple the country’s Gross Domestic Product, GDP, create jobs, and expand intra-African trade.
Describing the DRC as a “geological scandal,” the country’s Minister of Industry, Julien Paluku said the DRC is home to some 25 million tons of Cobalt and boasts the largest Lithium deposit in the world.
“We exported minerals, but no one saw the returns on the economy,” he said during a webinar prior to the Forum.
The Bloomberg study commissioned by the UN Economic Commission for Africa, Afreximbank, the African Development Bank (AfDB), the Africa Finance Corporation (AFC), the Arab Bank for Economic Development in Africa (BADEA), the African Legal Support Facility (ALSF), and the UN Global Compact—estimates that it would cost $39 million to build a 10,000 metric-ton cathode precursor plant in the DRC. This is three times cheaper than what a similar plant in the US would cost.
With demand for cobalt-the raw material used in the fabrication of electric batteries expected to double by 2040, the DRC stands to significantly increase its GDP were the industry to effectively take off.
“What is at stake for us,” asked Vera Songwe, the Executive Secretary of the UN Commission for Africa. It was a rhetorical question she herself provided an answer for.
“The GDP of the DRC is about USD 50 Billion. The global market for the export of Cobalt is about USD 11 billion. As we all know, the DRC has 70% of the World’s Cobalt.70% of 11 billion is somewhere in the region of USD 7.3 Billion. So, if all the DRC did was to continue to export raw Cobalt, between now and 2040, we will be at about USD22 billion of global demand, DRC will still have 70% of the market, so we would be somewhere in the order of USD 14 billion of additional GDP from exporting raw Cobalt.”
But this picture could change radically were electric batteries to be fabricated in the DRC. Songwe says just fabricating batteries could insert the DRC into a market worth USD271 Billion.
“If we are able to transform the DRC’s Cobalt into batteries, we take the DRC from a USD 11Billion market to a USD271 Billion market. If we were able to claim just 20% of that market, we would be getting some USD 52 Billion, so I think the math’s clear for all to see.”
Already, the DRC government has set up a Battery Council to oversee the project.
But it’s not only the DRC that will benefit. It has to do with developing a regional value chain around the electric battery industry, given that other raw materials that will be used in the fabrication of the batteries are found elsewhere in Africa.
According to Antonio Pedro, Deputy Executive Secretary at the Economic Commission for Africa, the plant could source manganese from South Africa and Madagascar, copper from Zambia, graphite from Mozambique and Tanzania, phosphate from Morocco, and lithium from Zimbabwe.
“That alone will facilitate the development of regional value chains.” Ms. Songwe said pooling all those minerals together in a factory in the DRC will “create more value on the continent, create more jobs and we will also keep the global world clean because we are moving into cleaner batteries.”
She challenged the DRC to create an enabling environment for investors to take advantage of the opportunity.