AFRICA has yet to establish its own supersized battery factory, a concept popularised by Elon Musk’s ‘gigafactories.’ These massive facilities have the capacity to produce batteries capable of storing at least 1 billion watt-hours of electricity, equivalent to powering 16,000 Tesla Model 3 electric cars. While hundreds of such battery factories exist across Asia, North America, and Europe, Africa and South America have yet to join the league, despite being important sources of metals crucial for electric vehicle (EV) battery production.
However, a recent agreement between Chinese battery manufacturer Gotion High-Tech Co. and the Kingdom of Morocco may change that. The memorandum of understanding sets the stage for the first EV battery factory in Africa, with an annual capacity of 100 gigawatts and a substantial investment of €6bn ($6.4bn). Gotion, listed on both China’s Shenzhen Stock Exchange and Switzerland’s Zurich Stock Exchange, is among the world’s top 10 battery manufacturers.
The next step involves signing an investment agreement, according to Mohcine Jazouli, Morocco’s delegate minister in charge of investment and public policies. The project aligns with the goals of decarbonisation and the deployment of innovative energy solutions, as stated by Gotion President Li Zhen in a statement released by Morocco’s investment agency. Further comments from Gotion were not provided.
The refining and manufacturing facilities responsible for transforming raw lithium, cobalt, or manganese into battery components are often located in countries that do not produce these metals. The majority of the supply chain, along with the associated revenue, resides in China, South Korea, Japan, Europe, and the United States.
The prospects for substantial changes in the foreseeable future are slim. BloombergNEF’s latest report, which tracks announcements made through October 2022, predicts that no African nations will add lithium-ion battery manufacturing capacity until 2027. In BloombergNEF’s evaluation of lithium battery supply chain activity, Morocco ranks 28th out of 30 countries.
If realised, the Gotion factory in Morocco would become one of the largest globally. It would represent nearly one-third of the capacity of the leading battery manufacturer, Contemporary Amperex Technology Co Ltd., and surpass the total installed capacity in the United States.
Projects like Gotion’s have the potential to attract investment in clean technologies in Africa, which currently lags behind as a destination for green investment. Despite being responsible for just 4 percent of global greenhouse gas emissions, the continent is heavily impacted by climate change. According to BloombergNEF, in 2021, only 0.6 percent of global renewable energy investment went to Africa. The continent received a mere $29.5bn in climate finance flows from 2019 to 2020, with private contributions accounting for just 14 percent of the total.
Processing battery materials near their sources could help reduce emissions along the supply chain. A BloombergNEF report on the cobalt value chain in the Democratic Republic of Congo indicates that establishing a plant to process raw cobalt into cathode precursors, which could be integrated into batteries, would cost $39 million in the DRC, significantly lower than the cost in the US. Such a move could also reduce production-related emissions by 30 percent.
(with Bloomberg)