Africa: Save it from Greenwishers who are acting like colonialists.
Help Africa bring inexpensive electricity to their homes and businesses.
Every weekend (almost) I share five articles/essays/reports with you. I select these over the course of the week because they are either insightful, informative, interesting, important, or a combination of the above.
When it comes to the politics of the “Green Energy Transition”, there is a more noticeable earnestness among politicians on this side of the Atlantic Ocean, especially when compared to those on Capitol Hill in the USA. Green parties have long been part of the legislative systems in Western Europe, and have burrowed deep within its chambers, just like they have managed to do so in Brussels as well.
There is no need to repeat the disaster that green policies have wrought upon Germany as we have covered that many times before on this Substack. Personally, I am all for so-called “green energy”, provided that the strategy is one that centres around the development of the technology in the long-term, and not as some sort of short-to-medium term political point scoring, or even worse, as a corruption scheme via crony capitalism.
One of the major themes of this Substack is idealism crashing head first into reality. The War in Ukraine and the rush toward sanctioning Russian oil and gas has left Europe scrambling about for alternative sources of energy. Middle Eastern energy giants have locked themselves into long-term contracts with customers to the east, rejecting the short-term or ‘spot price’ approach preferred to its geographical west (Europe). With green energy unable to fill in the gap created by the poorly thought out sanctions regime against Moscow, and with the 'green transition’ being slowed down, Europe is turning to its southern neighbour, Africa.
Africa was not all that long ago Europe’s political backyard. Colonized and partitioned by a handful of European kingdoms and states, the continent was under the firm control of its neighbours to the north. This control began to erode by the middle of the last century, with a flurry of independence movements taking root and succeeding to set up their own states during the Cold War era. For the most part, the promises made to Africans in their quest for political independence have failed to bear fruit, as much of the continent became held hostage to corrupt regimes that lined their pockets via sweetheart deals with western business interests.
Today’s Africa is not only rich and oil and gas, but also contains huge deposits of lithium, platinum, cobalt, and other resources that are vital to how our economies are now run, especially when it comes to technology. It is precisely this wealth that has spurred on the start of a “New Scramble for Africa”, but one in which Europeans have to contend with not just the Americans, but also Turkey, and most of all, China:
Moscow is sending Wagner mercenaries to, among other countries, Mali, where they are propping up the junta, to the dismay of former colonial power France. The European Union and the United States have launched a charm offensive on the continent to avoid losing more countries to Russia and China.
Raw materials from Africa – oil and gas, but also lithium and cobalt – are becoming increasingly important. Heads of state and companies from around the world are lining up in countries like Senegal, Congo and Namibia. China, Turkey and now Europe are trying to build up influence in Africa through infrastructure projects. Some are speaking of a new "scramble for Africa" – a reference to the colonial conquests in the 19th and 20th centuries and the bloc politics of the Cold War.
France’s standing on the African continent has taken the most significant beating in recent years, with the Russians moving in to fill the vacuum. In many ways, this has been an own goal, thanks to western academia’s focus on “decolonization”, which has made a complex story very black and white; the west as “evil colonists”, and Africans as “exploited indigenous”. Russia and China, both without a history of colonization on the continent, have managed to take advantage of this intellectual and historical argument for their own benefit.
But one thing is different now, as the leaders' peace mission in Russia and Ukraine show – the African countries are now self-confident. They can choose their partners and are doing so. It matters who makes the best offer: Russia, China, the U.S., the EU – in many cases, it's less a question of ideology than of cost-benefit calculations.
Even more to the advantage of both Russia and China, their interests in Africa do not come attached with all sorts of “human rights” demands like those that emanate from the USA and Europe. These two countries are engaged in a strictly transactional set of relationships with African partners. The cost of doing business with them is therefore perceived by African leaders as not just much lower overall, but also more respectful of their cultures.
The race is on!
Africa is full of raw materials that the rest of the world depends on – lithium, cobalt but also gold and diamonds. The world' largest deposit of platinum is also on the continent. Ever since the revival of nuclear energy in many places, uranium is once again in demand, and eyes are turning especially to Namibia and Niger, which are home to large deposits. In short, the global north's industrial growth wouldn't be possible without Africa.
Colonial powers ruthlessly exploited the continent's resources and shipped them to Europe. After the countries' independence, this carried on: Countries from the north profited, leaving behind poverty and environmental damage, as well as a frequently corrupt elite. By contrast, China, which is increasingly investing in mines in Africa, and Russia, which exploits the raw materials in countries like the Central African Republic, are comparatively new to the game.
Risk-adverse West:
The Australians found large amounts of lithium-rich rock in Manono in 2018. Because it's expensive to mine the metal, they teamed up with another company, in which the Chinese battery giant CATL has a stake. For $240 million, the Chinese were promised a 24-percent stake in the Dathcom joint lithium venture. "We would have loved to have worked with European or American companies, but unfortunately, they're afraid of investing in countries like Congo," says AVZ head Ferguson.
Long-term concessions require long-term stable governance; something that Africa is not well-known for. The Chinese are happy to take the risk:
Europe and the U.S. are afraid of losing influence in Africa. But nobody wants to invest large amounts of money in an unstable country. According to experts, most of Congo's raw materials exports go to China. "Chinese President Xi Jinping has issued the directive: Go out and get what you can. And now we're experiencing exactly that," says Ferguson.
Fossil-fuel boom:
A fossil-fuel boom has broken out in many African countries. In Uganda, the French company Total wants to extract oil in a nature preserve together with a Chinese state company. There are plans for a pipeline that can transport the oil through the Tanzanian Serengeti to the Indian Ocean. In the Democratic Republic of Congo, oil fields are being auctioned off to the highest bidders. Drilling is also taking place off the southern coast of Namibia, where several platforms are already installed in the water, even though the country is presenting itself as a trailblazer in the green energy revolution. Countries are taking what they can.
Many projects are still in the early stages, but hopes on the continent are high, as is the interest of oil and gas corporations from industrialized nations. In 2021, the African countries altogether produced 260 billion cubic meters of gas. According to the Forum of Gas Exporting Countries, that volume is expected to rise to as much as 585 billion cubic meters by 2050.
This excerpt is very interesting:
German Chancellor Olaf Scholz was in Senegal last May. The visit was remarkable. The chancellor said that it makes sense to "intensively pursue" a partnership for gas extraction. Berlin is under pressure to find alternatives to Russian natural gas, and the West African nation is potentially prepared to help fill the void.
Senegal President Macky Sall and his cabinet currently have their pick of European partners: France, Portugal, Poland, Italy – all are currently vying for his country's natural gas, even though it's not even ready for production.
This despite the fact that, as recently as last year, European governments called for a shift to renewable energies on the African continent. Sall was always against it, anyway. At the UN General Assembly, Senegal's president said: "The continent that is contributing the least to pollution and is the furthest behind in industrialization should extract its natural resources." After all, he said, Europe had done this decades ago, and now, despite their past warnings, the Europeans want to immediately extract Senegalese gas. Necessity, it turns out, is preventing the transition to green energy.
“Necessity, it turns out, is preventing the transition to green energy.”
We’ll end this segment with a chart that says it all: