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Continued investment and development in Africa expected

INCREASING DEMAND Cobalt demand is set to grow significantly and prices are expected to remain high

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JACK BEDDER Africa has a significant role to play in the lithium-ion battery and electric vehicle story

25th January 2019

By: Jessica Oosthuizen

Creamer Media Reporter

     

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International metals and minerals consultancy Roskill expects continued interest, investment and development in Africa as the electronic vehicle (EV) revolution continues, says Roskill director Jack Bedder.

“Africa has a significant role to play in the lithium-ion battery and EV story. The continent is home to several key battery materials producers and projects,” he tells Mining Weekly.

He adds that end-users, especially electronics and automotive companies, are becoming increasingly interested in the provenance of their raw material inputs and are exploring ways of securing access to supply.

He notes that lithium projects are being developed in the Democratic Republic of Congo (DRC), Namibia and smaller-scale producer Zimbabwe. The DRC accounts for more than 70% of global cobalt supply and is home to the world’s largest projects, however Madagascar, Morocco, Zambia and Zimbabwe are also producers, he notes. Natural graphite is produced in Madagascar, Mozambique and Zimbabwe.

Further, he points out that South Africa is the world’s largest producer of manganese ore and will soon be a nickel sulphate producer if nickel sulphate developer Thakadu Battery Materials completes the construction of its nickel sulphate purification plant at platinum miner Lonmin’s base metals refinery, in the North West.

“However, it remains to be seen which countries and projects will attract investment, pending on issues related to governance and regulation.”

Bedder comments that mining companies operating in the DRC and Zambia are concerned amid recent and upcoming tax and royalty increases in these countries.

Zambia Finance Minister Margaret Mwanakatwe said in September 2018 that the country would introduce new mining duties and increase royalties as the country aims to reduce its budget deficit. A new mining code which increases royalties and taxes for mining companies was signed into law in the DRC in March last year. The new mining code increases royalties on copper from 2% to 3.5%. The royalty rate for cobalt is now 10% and will also be 10% in Zambia if prices rise above $7 500/t.

Bedder notes that cobalt demand is set to grow significantly and prices are expected to remain high. “Central African mineral deposit assets are in demand as processors and end-users, especially in China, look to secure feedstock for their supply chains. Under the circumstances, it is not surprising that governments are playing hardball.”

He will be a speaker at the Investing in African Mining Indaba on February 5 – as part of the new Battery Metals Day at the event – with regard to developments in anode and cathode technologies. The focus will be on future trends in lithium-ion batteries, especially related to cathode technologies that are expected to dominate over the next few years.

Roskill will also host an event on the sidelines of the Indaba on February 6 at specialist motoring centre Crossley & Webb, where it will provide its latest outlook on EVs, lithium-ion batteries and raw material market trends. Anyone can sign up through Roskill’s website for the free networking event, he points out. The company will also share insights on raw materials that are essential to South African mining, such as chromium, manganese and vanadium.

Bedder believes that the mood at this year’s Indaba will be optimistic.

He

believes that it has been a good year for South Africa’s mining industry on the regulatory front, noting that consensus was that regulatory ambiguity was holding the industry back.

“The finalisation of Mining Charter III, the appointment of Gwede Mantashe as Mineral Resources Minister and other measures, such as withdrawing the Mineral and Petroleum Resources Development Act Amendment Bill and putting pressure on Eskom to conclude outstanding power-purchase agreements, are positive steps to restore confidence in the sector.”

Further, it appears that Mantashe and President Cyril Ramaphosa are focused on attracting investment and working with domestic producers to secure growth, with the economic outlook better, and export-led growth expected to increase, albeit slowly, in 2019 and 2020, Bedder elaborates.

Edited by Zandile Mavuso
Creamer Media Senior Deputy Editor: Features

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