UNCTAD report sees opportunities for Nigeria and other countries in EV evolution
• Charging resource-rich countries to increase added value for market management
A United Nations Conference on Trade and Development (UNCTAD) report on the significant mineral trade flows for electric vehicle batteries has revealed significant opportunities in the value chain for Nigeria and other mineral-rich developing countries.
However, to benefit from rising demand, countries involved will need to increase value addition, the report said. As the COP28 summit unfolds, the UNCTAD report focuses on trade in critical minerals essential to clean energy technologies.
We examine trade flows for lithium, cobalt and graphite through the global value chain for electric vehicle (EV) batteries, highlighting opportunities and challenges for mineral-rich developing countries.
Dr. Akinwumi Adesina, President of the African Development Bank (AfDB), at the Guardian's 40th Anniversary Public Lecture, appealed to African countries to increase value addition to take the lead in the evolving EV market.
Adesina noted that the continent has a great opportunity to guide the market dynamics rather than just waiting to jump in as a consumer.
In a net-zero emissions scenario, demand for minerals is expected to rise sharply, for example by 454% for lithium and 115% for cobalt by 2030, the report said.
He further said that developing countries, particularly Africa, which has 19% of the world's mineral reserves needed for EVs, stand to benefit from the green boom if minerals can be processed locally.
UNCTAD Secretary-General Rebecca Grinspan said at the COP28 event on critical minerals and the energy transition that the energy transition is an opportunity for mineral-rich countries to strengthen emerging industries and strengthen their positions in global value chains.
The report's analysis of trade trends in the EV supply chain highlights the significant value added at each stage of processing as minerals are extracted and processed into batteries and other components.
The report highlights the success of the Democratic Republic of the Congo in increasing the value added of cobalt, and by processing and refining this mineral locally, the African country will be able to increase the cost per kilogram mined by 2022. The company said it has raised the price from $5.8 per kilogram to $16.2 per kilogram after processing.
This move up the value chain led to the country exporting $6 billion of processed cobalt and $167 million of rough cobalt ore last year.
In countries like the Democratic Republic of the Congo, which have historically relied on raw material exports, local value addition is essential to economic resilience.
Grinspun said it was also important to ensure that the surge in demand for critical minerals did not make these countries even more dependent on primary products.
This dependence makes us vulnerable to market price fluctuations and global crises such as the COVID-19 pandemic. It is also associated with lower socio-economic development. As of 2021, 29 of the 32 countries classified by the United Nations as having low human development were dependent on primary products.
The UNCTAD report highlights market concentration at various stages of the EV battery value chain and the associated risks of supply disruptions, price volatility and geopolitical tensions.
Mr. Grinspun highlighted the need for more sustainable and transparent mining contracts in developing countries. Improving mining contracts and exploration licenses for key minerals could help strengthen the domestic industry, allowing local companies to design, source, manufacture and supply needed EV battery components, he said.
Mr. Grinspun also emphasized the vital role that global support plays in providing affordable and sufficient investment and access to the technology that developing countries need to add value to their critical mineral exports. He emphasized that he is fulfilling his role.
Source: guardian.ng