Can Uganda become an electric car battery-producing country?

In his recent meetings with a number of foreign delegates, President Museveni has been hinting at the need to locally manufacture electric car batteries for the Electronic Vehicles being manufactured by Kira Motors. Ordinarily, this is an exciting statement for anyone who doesn’t know the underlying complexities involved in the manufacture of an EV battery. Unlike agricultural raw materials, the intricacies involved in extracting and processing mineral ores into metals and finally into usable alloys are more complex and require a longer value-addition chain compared to agricultural products.

A quick look at the key minerals in an average lithium-ion battery that powers an EV; Graphite 28.1%, Aluminum 18.9%, Nickle 15.7%, Copper 10.8%, Steel 10.8%, Manganese 5.4%, Cobalt 4.3%, Lithium 3.2%, Iron 2.7%. Source: https://elements.visualcapitalist.com/the-key-minerals-in-an-ev-battery/. This simply means if we are to manufacture any EV batteries we need to be able to manufacture all of the above components that make up an EV battery. Now, a layman who looks at the mineral occurrence map of you Uganda he/she would argue that we have all of the above minerals which is true but we only have traces of these minerals and not proven commercially viable deposits. 

For Uganda to produce EV batteries, we would need operating mines for most of the above minerals. Knowing the current state of our mining sector we clearly have no potential of being an EV battery producer any time soon but we can become an EV component producer if we strategically positioned ourselves. 

In March this year, Telsa signed a 3-year contract with Uranex Tanzania and Magnis Technologies Tz to supply between 17,500 tons and 35,000 tons of Anode Active Material (AAm) annually. The Nachu Graphite project owned by Uranex that’s near the coastal town of Lindi in Tanzania is going to be the primary source of the graphite that will be processed into the Anode Active Material to be supplied to Tesla. Anodes in an EV battery are mainly made up of graphite, now the question is why was the Nachu Graphite project able to win such a huge contract from a big company like Tesla and not our very own Oram-cross graphite project in Kitgum.

Did Tesla consider the economic and mining policies of Tanzania to be those of Uganda? The Ugandan government should be asking itself these questions because supplying EV battery components to a big player like Tesla would go a long way in helping the president realize his dream of producing EV batteries for the country’s very own Kira Motors. 

Uganda’s ambitions of wanting to become an EV battery-producing country comes at no worse time than when the base-metal mining sector is suffering from the Dutch disease, export restrictions and a new mining law that some say doesn’t relate to current conditions of the sector in the country. These and many other conditions are repelling FDI that would have been used to do extensive mineral exploration and reserve quantification of the green minerals that we have in the country. Attracting FDI for mineral exploration for a country like Uganda would strategically position us as a key source of lithium-ion battery components on the continent. 

The policymakers in government that have been pushing for the ban of mineral exports and especially for lithium ore would argue that Zimbabwe and others in the region have done it and we should also follow suit. It’s true across Africa from Zimbabwe to our neighbours Rwanda and Burundi, they have all banned the export of lithium ore and some are preparing special legislation for this “new oil”. 

But Uganda is not Zimbabwe, Zimbabwe attracted investments of close to 1b$ for its mining sector in 2022. It’s also home to Bikita mines, the oldest lithium mine in Africa and home to the biggest known lithium deposits on the continent. Therefore, Zimbabwe can afford the luxury of imposing export restrictions on its vibrant mining sector and get away with it, which is not the case for Uganda. 

However, the new Lithium-law in Zimbabwe only bans the export of lithium rough ore and not concentrates. All lithium mines are required by law to have lithium concentrating plants to process the lithium rough ore up to a certain percentage clearly defined by law. So essentially the new law in Zimbabwe doesn’t require investors to produce lithium hydroxide or lithium carbonate, they are still exporting lithium ore but of an improved percentage. 

Zimbabwe must have learnt from the blanket export ban it imposed on its chromium industry in 2012, which led to the total collapse of the sector. Gabon being the second biggest producer of manganese in the world has been imposing export control measures on its manganese industry for years but it later realized it lacked enough capacity to add value to its entire production. So it set up mid-size processing plants and it is exporting to the rest of the world. South Africa has also tried export restrictions on its lead industry with little success. Zambia has done the same with its copper sector but with little success. 

Therefore, the policymakers in government should know that export control measures do not necessarily lead to the development of downstream industries in the mining sector. These policies have failed in countries with the biggest mineral reserves in the world like Gabon and Zimbabwe they cannot work in Uganda.  

As miners in this country, we all believe and subscribe to the idea of mineral value addition being fronted by the government however, let it be a gradual process with strategies and deliberate police to this endeavour.  If the president wants to develop lithium-ion batteries locally, let’s develop a national supply chain strategy for the EV battery minerals. Countries like the USA have a national electric vehicle supply chain strategy which is mainly revolving around lithium development. Let government work together with the private sector to develop the potential green fields across the country by investing in exploration drilling to identify commercially viable mineral reserves. 

Once we identify these deposits, we can move on to asset development which takes some time to attain profitability and it’s during this stage that government should let mine owners be able to export and generate running capital to keep the mines operational until they attain profitability. Once we have profitable mines that have developed enough production capacity and can sustainably feed smelters or refining plants we believe investors will freely set up these plants on their own because it will be a profitable business.

The writer; Agumya Allan (gmyallan@gmail.com) is the the Vice-Chairman Miners’ Forum Uganda