Demand for the minerals used in renewable energy and electric vehicle production is booming. That trend will continue to expand rapidly. Four mineral-rich African economies—Guinea (which is rich in bauxite), the Democratic Republic of Congo (cobalt), Madagascar (graphite, nickel), and Mozambique (graphite)—could benefit from this increased demand, but their lagging energy infrastructure hampers that goal.
Without huge investments, these four African nations lack the electricity infrastructure needed to expand their refining capacity. At present, they depend on exporting cheaper, unrefined ore products. Investing in domestic refining capacity would allow them to sell more expensive refined intermediate goods, which would boost export values and create more jobs.
In all these countries less than half of the population has access to electricity. Guinea has the greatest share of residents with electricity but only around a thousand megawatts (MWs) of installed energy capacity. Guinea needs to expand its capacity tenfold to meet its refining aspirations.
The four African economies even trail developing economies in Asia with similar levels of electricity access. Mozambique has the most installed energy capacity per capita, but it is still only 56 percent of the average capacity of frontier and developing Asian economies.
The good news is that Guinea, the Democratic Republic of Congo, Madagascar, and Mozambique have vast renewable energy potential, particularly hydropower. If developed, these resources could meet their refining needs and provide universal access to electricity. But to secure sufficient private financing, they will need to deal with political instability and mitigate the social costs of big energy projects.
This PIIE Chart is based Cullen Hendrix’s Policy Brief, Building downstream capacity for critical minerals in Africa: challenges and opportunities. Produced and designed by Nia Kitchin and Oliver Ward.