Industrialisation, Beneficiation, Value Addition: towards the transformation of OACPS Economies
From 20 to 22 November 2023, OACPS Experts met in Lusaka, Zambia, to be sensitized on the EU Critical Raw Materials Act (see below) and identify opportunities presented by the Regulation in terms of promotion of value addition, industrialization, and enhanced trade and investment. The meeting was also expected to be an opportunity to share experiences, best practices and lessons learnt. The experts were called to identify the critical elements needed for OACPS to play an increasing and active role in the Digital and Green transition.
The main objective of the Lusaka meeting was to develop an OACPS Position on Critical Raw Materials. This Position will be presented to the Meeting of Ministers of Mines envisaged to take place next year 2024 in Cameroon.
CRITICAL RAW MATERIALS: ACCESS OACPS KEY MESSAGES AT A GLANCE
- CRMs could significantly contribute to the transformation of OACPS countries. There is an economic dimension – capturing additional value and fuel industrialisation, but also promote sustainability – low carbon economies and fuelling renewable energy; and social development (community-based mining, education, health and electrification).
- The Critical Raw Materials Act presents an opportunity for enhanced collaboration between EU and the OACPS on local value addition and industrialization.
- 95 of 142 developing countries (66.9 per cent) were commodity-dependent during 2019– 2021; 45 of African 53 countries (83.3 per cent) were commodity-dependent.
- The newly signed Samoa Agreement calls on parties to promote the transformation of African economies and their transition from commodity dependence to diversified economies through the local treatment and processing of raw materials.
- Treating CRMs as value chains allows recognition of the role of services and link with agriculture, power generation and infrastructural development but also backward/forward/lateral linkages also allow for sustainable industries to emerge.
THE EUROPEAN CRITICAL RAW MATERIALS ACT: INTRODUCTION
The general objective of the EU’s Critical Raw Materials Act adopted in September 2023 is to ensure the EU’s access to a secure, diversified, affordable and sustainable supply of critical raw materials. Specific objectives are to:
- strengthen EU’s capacities along the different stages of the value chain;
- diversify EU’s imports of raw materials;
- develop EU CRM sources through enhanced exploration and recycling (circular economy);
- improve monitoring and risk mitigation capacities; and
- ensure a well-functioning single market while improving the sustainability and circularity of critical raw materials.
Although there are various definitions of Critical Raw materials (CRMs), it is commonly recognized that CRMs are indispensable for a wide set of strategic sectors including the net zero industry, the digital industry, aerospace, and other “high tech” sectors. CRMs are also subject to supply risk.
The EU has identified 34 raw materials as being “Critical” while another 16 are “Strategic”. Click here for more details
The CRM Act aims to strengthen the value chains for these strategic raw materials in the EU, from their extraction to processing and recycling. To do so, it will select ‘Strategic Projects’, which will benefit from streamlined permitting. The Act sets targets to extract 10 per cent, process 40 per cent, and recycle 15 per cent of the EU’s annual consumption of strategic raw materials within the EU.
CHALLENGES AND OPPORTUNITIES FOR OACPS COUNTRIES
The newly signed Samoa Agreement calls on parties to promote the transformation of African economies and their transition from commodity dependence to diversified economies through the local treatment and processing of raw materials.
Industrialization, beneficiation, value addition is key to the transformation of OACPS economies, as confirmed by Junior Lodge, Assistant Secretary General (ASG), Structural Economic Transformation and Trade, of the OACPS Secretariat. In the following two videos, he identifies a series of challenges and opportunities to OACPS trade and investment issues are arising from the treatment of critical raw materials.