PRESS RELEASE: SARW Welcomes President Ramaphosa’s Promise of a Renewable Energy Revolution in South Africa with Cautious Optimism

Johannesburg, 24 July 2024: In his address at the Opening of Parliament on 18 July, President Ramaphosa promised significant advancements in energy security and the transition to clean energy systems. He declared that South Africa is on a path to a “renewable energy revolution.” The President outlined this renewable energy promise as part of a Minimum Programme which forms the foundation of the work of the Government of National Unity (GNU). “Over the next five years, we will seize the enormous opportunity in renewable energy for inclusive growth. South Africa has some of the best solar and wind resources in the world,” he said.

The President declared that significant growth and job creation in this burgeoning energy sector will be achieved over the next decade and beyond. “To create more jobs for South Africans, we will focus on processing our minerals to export finished products rather than raw commodities,” the President said. “As we undertake a just transition towards renewable energy, South Africa must create a green manufacturing sector centred on the export of green hydrogen and associated products, electric vehicles and renewable energy components,” the President added.

At this high level, the President struck the right notes. But the story was incomplete.

“We need to credit the President for committing to minerals value addition. But I think he missed the opportunity to link his renewable energy promise to South Africa’s rich deposits of critical minerals and metals such as manganese, platinum group metals, and Rare Earth Elements that are essential for the manufacturing of green technologies,” said Dr. Claude Kabemba, Executive Director of the Johannesburg-based think tank, Southern Africa Resource Watch (SARW). He added, “A lot of political will is required for local beneficiation of mining resources to drive the green energy transition. We hope this will be shown in the GNU’s Medium Term Development Plan, which we expect to be more detailed.”

In addition to iron ore and platinum, South Africa has abundant manganese, chromium, cobalt, copper, silver, beryllium, and titanium reserves. These minerals and metals are an important feedstock in producing various green technologies, including solar panels, wind turbines, and battery storage systems. According to the U.S. Geological Survey, South Africa holds approximately 75% of the world’s platinum group metals, 80% of its manganese, and significant quantities of chromium and vanadium.

According to the International Energy Agency, demand for critical minerals will grow by three and a half times by 2030 as the world transitions from fossil fuels to renewable energy, aiming to reduce global carbon dioxide emissions to net zero by 2050.

In 2023 alone, South Africa’s imports of solar panel cells, lithium-ion batteries, and inverters surged to about R70 billion or $3,8 billion, a study by senior economist Gaylor Montmasson of Trade and Industrial Policy Strategies concludes. The cost of importing expensive green technologies such as solar panels, ion-lithium batteries, and wind turbines is passed on to and borne by consumers.

“We believe that localization of the production of green technologies will stop the bleeding of our forex account, end the externalization of green jobs through the export of raw critical minerals, and increase the country’s export revenue in the face of unprecedented global demand for green techs. It is time for our mining and industrial policies to align,” Kabemba said. “Most importantly, localization will reduce energy generation and transmission costs, increase energy access – especially for poor households – create sustainable green jobs and business opportunities for small to medium scale enterprises, and help South Africa meet the promise of a Just Energy Transition for the benefit of all.”

If President Ramaphosa’s vision becomes a reality, South Africa could see an end to its energy security and access challenges, including the much-anticipated permanent break from load-shedding — a welcome relief for South Africans who have enjoyed 121 consecutive days without it.

However, public policy must fit the purpose for the vision to come true under the GNU. Mining reforms to the current mineral beneficiation policies must be introduced faster than usual. Tax incentives, deliberate public procurement for renewable energy products, viable tariff systems, and expedited installation of energy transmission infrastructure such as grid expansion, EV charging facilities, and battery storage systems must also be expedited.

In an era of geopolitics around energy transition mineral resources among global superpowers such as the United States, European Union, and China, SARW would like to see more action and bite in South Africa’s foreign policy in favour of regional trade integration and localization of green-tech manufacturing. “In the spirit of Nelson Mandela, we are convinced that South Africa, as the continent’s most industrialized and diverse mining economy, must take bold leadership in driving the agenda to add value to critical minerals and revolutionize the manufacture of green tech,” Kabemba said.

In its message commemorating International Mandela Day, SARW aptly quoted Nelson Mandela’s address at the Sub-Saharan Oil and Minerals Conference on 27 March 1995: “…there will be a need for greater regional and even Pan-African cooperation and integration in the exploitation, use, and processing of mineral and oil resources. Resources should be used and processed where it makes economic sense. This will sometimes require the subordination of short-term national interests to the longer-term mutual benefits arising from cooperation.” This message is as relevant today as South Africa and the continent’s transition to green economies.

While Ramaphosa mentions the African market as an existential opportunity, he could have taken a further step by mentioning the continental market for clean energy products.

“We see great potential for growth beyond our borders. As we strengthen economic diplomacy with our largest trading partners and potential trading partners, we will prioritise the implementation of the African Continental Free Trade Area to increase our exports to the rest of the continent,” President Ramaphosa said in his speech.

In 2022, the Democratic Republic of Congo and Zambia signed a cooperation agreement to develop a value chain in the electric battery and clean energy sector. The two countries are home to at least 80 percent of the minerals, such as cobalt and copper, required to produce electric car batteries. This partnership exemplifies the kind of regional cooperation and integration that can amplify the benefits of the green energy transition.

The era of green technology is here. South Africa’s GNU must act decisively to embrace it, ensuring that the renewable energy revolution benefits all citizens and supports a sustainable and just future.

For more information, contact: info@sarwatch.org