As global players make strides towards transitioning to a cleaner energy future, demand for critical minerals – which are essential for the production of lithium-ion batteries and associated technologies behind solar and wind components and renewable power systems – is projected to grow 500% by 2050.
As such, investment has begun to accelerate towards the mining and green mining industries – with South Africa well-positioned to seize this opportunity.
Accounting for 60% of the world’s manganese supply, 75% of platinum, and 40% of palladium, as well as boasting significant quantities of rare earth elements (REE), investing in South Africa’s critical mineral resources will not only trigger economic opportunities such as job creation, revenue generation, and the acceleration of the Just Energy Transition, but will be key for diversifying global supply chains and reducing prices – a goal set out by countries worldwide.
“The ground has already been laid for deal-making with South Africa in this sector,” says James Chester, senior director of Energy Capital & Power (ECP), organisers of the African Critical Minerals Summit scheduled to be held in Johannesburg on 6 and 7 November. “There is a group of 11 countries – the Mineral Security Partnership (MSP) – which was announced in 2022. This is a group of developed countries that are looking for projects across the world so that they can diversify their supply chain.
“There are billions of dollars waiting to be invested in South Africa and across Africa,” Chester says. “We need to create the environment where that money can come in and those projects can be executed.”
Representing a US-led initiative that aims to bolster supply chains while catalysing investment from government and the private sector, the MSP is seeking alternative investment opportunities focusing on minerals such as cobalt, nickel, and lithium, as well as the 17 REEs – and all attention has turned to South Africa.
Amid concerns over market overreliance and supply bottlenecks, the MSP is looking at investing in Africa’s entire mineral value chain.
“It is the Department of Mineral Resources and Energy that is really driving this initiative,” says Chester. “They want to put forward that they have a plan for critical minerals and want to articulate that further in November.
“The energy transition is here and it is the role of the private sector, together with the public sector, to ensure that people and businesses are ready for that – and that South Africa takes advantage and is not in the position of following the rest of the world, but actually leading the rest of the world.”