China, through its political leadership and intentional industrial and economic policy, positioned itself to be the world’s factory in the 1950s.
Today, China produces 80% of the world’s solar photovoltaic (PV) panels and makes up 60% of worldwide electric vehicle (EV) sales. Through its Belt and Road Initiative (BRI), it has been investing vigorously in metals and mining overseas. In the first half of 2023, this engagement through investments and construction contracts grew by 150% compared with the same period of 2022.
This is a strategic growth area for China’s investment through ownership of the minerals and metals that are relevant for the energy transition. Over the past decade China has invested in cobalt, lithium, copper, graphite, iron ore, lead, vanadium, chromium, manganese and zinc mining operations.
In a report by the Green Finance & Development Centre, which is tracking the BRI investments, they state that China’s energy investments in the first half of 2023 were the “greenest” since the inception of BRI in 2013.
The BRI engagement has been particularly strong in Africa, Asia and Latin America. However, Sub-Saharan Africa saw the most significant increase in BRI engagement, with Namibia, Eritrea, and Tanzania among the leading countries experiencing this growth. In the Democratic Republic of Congo (DRC) 70% of the mines are owned by Chinese investors. Countries such as Zimbabwe have, however, stood firm on their beneficiation plans, so China has commissioned a lithium processing plant in Zimbabwe.
China stands out as the world’s leading refiner of critical minerals. For instance, it processes a staggering 68% of all nickel, 40% of copper, 59% of lithium and a dominant 73% of global cobalt. This from 103 operational mines in China and 40 operational mines overseas. China is developing 42 mines within its borders and its overseas investment is set to double, with 89 mines in development.
Therefore, it should come as no surprise that China is a world leader in the energy transition and has thus raised the ire of its competitors.
The quote “China is a sleeping giant. When she wakes, she will shake the world” is unattributed, and as much as I’d love to say the same about Africa, our vast political dispensations, capitalist inclinations and non-homogeneity do not lend us to such dynamic thinking.
One thing is clear, the transition is benefiting those who don’t let a good crisis go to waste.
After climate talks last week, US President Joe Biden imposed a series of tariffs on goods made in China. This was to protect US manufacturers from what the US deems low-price Chinese imports that undercut domestic manufacturing and stifle innovation. In a tweet, Biden stated: “China is determined to dominate these industries. I’m determined to ensure America leads the world in them.”
The proposed tariffs are 25% on steel and aluminium; 50% on semiconductors; 100% on EVs; and 50% on solar panels.
Tariffs hardly work in achieving economic goals, but this is seen as a last-ditch attempt to save US industry. For nations that talk about reducing greenhouse gas emissions, these tariffs seem counterintuitive to the spirit of “just” transitions often preached to developing nations.
Many have started questioning the purpose of transitions, their reality and politics. The overarching theme is a recolonisation under a green banner that is sold as less harmful than fossil fuels, when it is simply a new economy that the vast population is disproportionately affected by though benefits the least from.
Given the energy transition trade wars, I hope it’s becoming apparent to policymakers that there is no such thing as a “just transition”. Transitions are premised on supremacy in an emergent economic dispensation. Each country is scrambling for market share and Africa, with 1-billion people, of whom 60% are not electrified and where the average car penetration rate is about 3%, is an untapped market for solar panels, inverters and EVs.
The world is open for business and Africa must buy.
• Mashele, an energy economist, is a member of the board of the National Transmission Company of SA.
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