[ACCI-CAVIE] The Democratic Republic of the Congo (DRC) can leverage its abundant cobalt resources and hydroelectric power to become a low-cost and low-emissions producer of lithium-ion battery cathode precursor materials, according to a new study on a unified African supply chain by BloombergNEF (BNEF).
The BNEF study—undertaken at the behest of UN Economic Commission for Africa (ECA), 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.
A similar plant in China and Poland would cost an estimated $112 million and $65 million, respectively. Precursor material produced at plants in the DRC could be cost competitive with material produced in China and Poland but with a lower environmental footprint.
Emissions associated with battery production could be cut by 30% compared with the existing supply chain that runs through China, if cathode precursor materials (the intermediate material between raw and finished cathode material) were produced in the DRC, with Poland handling the production of cathode materials and cells, and Germany the final pack assembly, according to the study. This is due to the DRC’s proximity to cathode raw materials and heavy reliance on hydroelectric power plants.
Electric vehicles represent a $7 trillion market opportunity between today and 2030, and $46 trillion between today and 2050, according to the new report, “The Cost of Producing Battery Precursors in the DRC”, launched at the DRC-Africa Business Forum 2021.
While there are notable leading electric-vehicle and cell manufacturers today, the sheer scale of growth expected in the coming decades means that there is inherent uncertainty over which companies and countries may come to dominate this new value chain. African countries could play a major role in the lithium-ion battery supply chain by taking advantage of their abundant natural resources and onshoring more of the value chain, the study suggests.
The African Continental Free Trade Area (AfCFTA) is a free-trade area covering 54 African Union nations, which came into force on 30 May 2019 and effectively went operational on 1 January 2021. The AfCFTA agreement has the potential to create the largest free-trade area in the world. If approached correctly, African countries can capitalize on their abundant natural resources, growing demand for vehicles and rapid urbanization to build a global hub to produce electric vehicles.
By Green Car Congress