The Angolan government is making no secret of its substantial reserves of critical minerals. Case in point, the 2nd Angolan Mining Conference & Exhibition (AMC) is scheduled for November 22-23. The conference’s objectives are clear, as it is titled “Developing Angola’s mineral resource potential to supply critical minerals for a global clean energy transition”.
According to media reports, Angola is planning to commence the production of neodymium and praseodymium for electric vehicle batteries, as well as copper and niobium in the next five years. Angola boasts 36 of the world’s 51 most critical minerals, including chromium, cobalt, graphite, lead, lithium, and nickel, positioning it as a significant player in the critical minerals production arena.
Scott Morgan, a seasoned African affairs analyst, notes that this shift indicates Angola’s intent to diversify its revenue sources beyond petroleum.
While Angola highlights its critical mineral wealth, there are concerns regarding African mining policies. African governments have increasingly imposed restrictions or bans on mineral exports to encourage processing and retain a more significant share of the economic benefits. This strategy aims to attract international industries to establish refining and processing facilities within Africa to stimulate technological development and local employment. Whether this strategy will prove effective remains uncertain.
The demand for critical minerals has prompted the modernization of essential railway systems, notably the Lobito rail corridor. Historically, this corridor was a vital transportation route, connecting Southern and Central Africa’s inland markets with the rest of the world, facilitating trade in various commodities. However, the Angolan Civil War severely disrupted its operations.
The three countries involved in the Lobito corridor – Angola, the Democratic Republic of the Congo (DRC), and Zambia – are keen on restoring the railways. A 30-year concession for the operation, management, and maintenance of the line was granted to the Lobito Atlantic Railways consortium. This consortium aims to link the Angolan port of Lobito to the heart of the DRC’s Copperbelt. The goal is to leverage the booming demand for critical minerals required for the world’s clean energy transition to drive infrastructure investment in the region. Realizing the full potential of the railway will require substantial investment, including the procurement of 1,555 wagons and 35 locomotives for the Angolan section of the corridor alone.
Reviving the railways will expedite the transportation of critical minerals and other commodities from Central Africa to ports. Mining companies often opt for road transport to other congested ports in Tanzania, Mozambique, and South Africa, but this is an expensive and time-consuming process. The revamped railway could significantly reduce transit times from the DRC to Lobito to under 36 hours.
The Lobito rail corridor project also holds geopolitical significance. Angola, historically close to China and Russia, has sought closer ties with the United States under President Joao Lourenco. Although there is no guarantee that minerals transported from Lobito will head west, the Atlantic port naturally faces Europe and the Americas. The United States and the European Union are committed to supporting the railway’s upgrade.
The modernization of the Lobito railway could potentially serve as a diversified source of investment in critical minerals and clean energy supply chains, a shared interest for Washington and Brussels. Although it has not been officially announced, it is highly likely that Angola and other stakeholders plan to export critical minerals to the United States, Europe, and other partner nations.
Japan, which is also exploring sources of critical minerals, is paying close attention to these developments. Japan’s Economy and Industry Minister Nishimura Yasutoshi visited several African nations, including Angola, to explore opportunities for cooperation in trade and investment.
Interestingly, the evolving situation suggests that Japan may also consider seabed mining in the future to access critical minerals, reducing its dependence on Angolan sources. This emerging focus on seabed mining is relevant in light of the global interest in critical minerals and rare earth elements.
It is essential for Angola to exercise caution and not overly rely on critical minerals to be the linchpin of its economy. Overreliance on natural resources, whether oil or minerals, for economic development can be precarious. Angola should use the revenue generated from critical minerals to diversify its economy and strengthen other industries.
While Africa is celebrated for its resource potential, historical patterns suggest that the ideal scenario of resource-driven prosperity benefiting the population is elusive. Transparency and prudent policies will be crucial to ensuring that Angola’s newfound wealth in critical minerals benefits its citizens, rather than being marred by corruption and profiteering by select individuals and state-owned companies.
