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THE DRC BATTERY COUNCIL: BUILDING THE SUSTAINABLE BATTERY SUPPLY CHAIN OF TOMORROW
APRIL 1, 2022 JANET“The country’s mining sector currently accounts for 98% of exports, 18% of GDP and 11% of jobs. If the DRC captures 20% of the market share for battery production, it will add around US$54 billion to its income and raise its GDP tremendously,” says UN Under-Secretary-General Vera Songwe.
Africa is a resource-rich continent, home to some 30% of the world’s known mineral reserves, including 40% of known gold and up to 90% of chromium and platinum reserves.
For centuries, this mineral wealth has been extracted by foreign nations or companies with very little value returned to the countries they are taken from, leaving Africa with little to gain from the global mineral supply chain.
The Democratic Republic of Congo (DRC) is seeking to change that unequal dynamic, taking the first steps to building a sustainable battery value chain within the DRC and greater Africa with the support of the new Democratic Republic of Congo Battery Council.
WHAT IS THE DRC BATTERY COUNCIL?
The main objective of the Democratic Republic of Congo’s DRC-Africa Business Forum in 2021 was to foster “the development of a battery, electric vehicle and renewable energy value chain and market in Africa”.The DRC-Africa Business Forum – after two hours of roundtable debate – brought together high-level stakeholders to form the Democratic Republic of Congo’s Battery Council with three strategic objectives:
- Support value creation of strategic minerals in Africa and strengthen productive capabilities in the battery value chain, to generate job creation on the continent via the battery value chain;
- Ensure a socially, environmentally responsible and sustainable battery value chain, which improves the lives of women and the youth; and
- Encourage local and African champions to invest in the battery industry.
- Leverage partnerships to attract and promote investment and innovation and technology for the transformation of Africa’s strategic minerals;
- Accelerate intra-African trade, skills building and research to unlock innovation along the battery value chain leveraging the African Continental Free Trade Area (AfCFTA);
- Collaborate to promote extensive partnerships and far-reaching exchanges of innovative ideas to ensure that the battery value chain is sustainable and accrues value to the local economy;
- Catalyse, fast-track and scale up action towards the vision; and
- Facilitate the generation of evidence-based studies, data, information on the battery value chain in the DRC and Africa.
“The DRC is at the heart of the battery value chain, as it is home to about 70% of world’s cobalt reserves,” UN Under-Secretary-General and executive secretary of the Economic Commission for Africa Vera Songwe said.
“The country’s mining sector currently accounts for 98% of exports, 18% of GDP and 11% of jobs.
“If the DRC captures 20% of the market share for battery production, it will add around US$54 billion to its income and raise its GDP tremendously.”
The head of state of the DRC and current chair of the African Union Commission (AU), Félix-Antoine Tshisekedi Tshilombo, also expressed his enthusiasm for the council to begin pursuing its goals: “The machine is now launched, it is necessary to start right after this forum.”
WHO’S INVOLVED?
The key participants included representatives of Zambia, Tanzania and Morocco, the UN Economic Commission for Africa, African Union Commission and Afreximbank.Other organisations included Africa Finance Cooperation, African Development Bank Group, Bosch Africa, The Arab Bank for Economic Development in Africa, and AVZ Minerals Ltd (ASX:AVZ).
AVZ Minerals was the only aspiring mining company to be invited to the forum, which managing director Nigel Ferguson sees as a logical choice.
“We’re sitting with one of the globally significant lithium and tin resources and the current geopolitical climate is gaining greater focus on green technology,” Ferguson said.
“The Australian Ambassador visited just recently and she said the DRC President, Felix Tshisekedi, was very keen on having more Australian companies come and do business in country because we’ve got a very good reputation for our technical expertise, our transparency and our professionalism.
“We also recognise the importance of having a local community that’s realising benefit from a national asset.”
AVZ Minerals has built its brand on a near ‘zero emissions’ operation, with an independent greenhouse gas assessment confirming the Manono Lithium and Tin Project could have one of the lowest carbon footprints of any hard rock lithium mine in the world.
“The DRC and Africa are strategically positioned to play a pivotal role in the global transition to clean energy and decarbonisation and the Manono project will greatly assist to improve the fortunes of the Congolese people, which AVZ Minerals is very supportive (of),” Ferguson commented.
CHALLENGES TO BE OVERCOME
There are many structural challenges to be overcome before the DRC Battery Council can meet its goals, not least of which is energy and transport infrastructure.The DRC currently operates under a large electricity deficit, where once it supplied excess energy to its neighbours.
Secretary-General of EGC (General Cobalt Company) and energy expert Vincent-Noël Vika Raissa Kikunda said that overcoming this first hurdle was paramount, and “the country will have to invest a billion dollars each year to hope to solve its electricity problem”.
Secretary-General Vika highlights that without access to financing and sovereign guarantees, long-term energy purchase contracts may fill the gap.
DRC will also likely need a more robust rail network, potentially a large industrial port and greater integration of the local population into the electric battery industry.
The private sector will be integral to the upskilling of DRC citizens, a role AVZ Minerals is already engaged in.
The mining company has plans to build and fit-out a school at Manono, the local town adjacent to AVZ’s mining project, and also intends to draw on a large pool of extensive mining experience in the form of locally recruited on-the-job traineeships.
“Giving locals an opportunity to have a skill or a trade and uplift themselves is something that’s very close to us,” Ferguson explained.
“The DRC is well endowed with not only natural mineral resources but also in their people. There’s a long history of mining in the country and many people are very technically capable.
“I’m absolutely comfortable with the fact that there’s enough technical capacity here to be able to fulfil those roles.”
Ferguson also highlighted a need for political stability and regulatory flexibility across greater Africa, often cited as one of the major reasons the continent can be risky to invest in.
David McLachlan-Karr, the Resident and Humanitarian Coordinator of the UN in DRC, commented that the Congo has the capacity to change the distribution of benefits from the green mineral value chains.
“Investors believe in this project and are involved. The work will be very complex, requiring a focused approach,” McLachlan-Karr said.
“Investing in this sector in DRC won’t just yield financial returns, but will be vital for the global reaching of the Paris agreement, and improving lives in DRC.”
