- Morocco and Tanzania offer competitive production costs, with prices close to Europe’s, positioning Africa as a critical hub for battery manufacturing.
- Morocco’s political stability, geographic location, and access to critical raw materials, including cathode materials, give it a leading edge in the battery supply chain.
- With global battery demand set to rise, Africa’s abundant raw materials and low-cost production can meet growing needs, especially in the US and EU markets.
At a renewable energy conference in Lagos, UK Foreign Secretary David Lammy unveiled a report highlighting Africa’s emerging role in the global battery supply chain. The report underscores Africa’s potential to become a key player in battery manufacturing, with countries like Morocco and Tanzania offering competitive production costs.
Lammy noted that Morocco’s production costs are around $72 per kilowatt-hour, while Tanzania’s costs can drop to as low as $68. These prices nearly match Europe’s $68 per kilowatt-hour. This cost competitiveness positions Africa as a potential hub for battery manufacturing.
The report, titled *”From Minerals to Manufacturing: Africa’s Competitiveness in Global Battery Supply Chains,”* identifies Morocco’s key advantages. The country benefits from political stability, strategic geographic location, and duty-free access to the EU and US markets. Morocco also holds abundant reserves of critical raw materials for battery production, including lithium.
Morocco currently produces cathode materials, which are essential for battery manufacturing. As a result, any factory in Africa will need to import these materials from Morocco or other global producers, such as China. This advantage strengthens Morocco’s position as a leader in African battery manufacturing.
The report also highlights global battery demand, which is expected to reach 7.8 terawatt-hours by 2035. China, the US, and Europe will account for about 80% of this demand, and lithium-ion batteries will make up roughly 80% of this total demand. However, the report warns of regional imbalances. China will have a surplus of batteries, while the US and Europe will face a shortage.
This shift creates a significant opportunity for Africa. As global economic growth slows, the EU aims to reduce its reliance on China. This will drive demand for African-produced materials used in battery manufacturing. Africa’s rich access to raw materials such as lithium, nickel, and copper puts the continent in a prime position to meet global battery manufacturing needs.
The report emphasises that Africa must target global demand and expand beyond Chinese sources to reach the required 10 to 15 gigawatt-hours scale. Serving markets like the US and EU will be critical. African nations must collaborate across the value chain to enhance competitiveness and meet the growing battery demand. The African Continental Free Trade Area (AfCFTA) offers a unique opportunity for such collaboration. By working together, African nations can boost their cost competitiveness and secure a larger global battery market share.
The report also highlights the importance of Africa’s low-cost electricity, inexpensive labour, and natural resource wealth in refining critical materials like lithium, nickel, copper, and manganese. These advantages could allow African refineries to outperform their global counterparts by 2030.
In conclusion, Africa’s global battery supply chain has immense potential. With countries like Morocco and Tanzania leading the way, Africa stands ready to become a significant player in the worldwide battery manufacturing market.