It's fascinating to hear from Professor John Bentil that, Takoradi Technical University (TTU) is considering taking advantage of the discovery of lithium ore in the Central Region to produce lithium batteries.

The concept arose when Francis Kojo Kudjodjie, acting on behalf of the Kantanka Group of Companies, put forth the proposal, during the inaugural edition of the Technology Innovation and Fair held at the Odro block forecourt in TTU.

This initiative could have significant implications for the university, the region, and the nation as a whole. Lithium batteries are widely used in various industries, including electronics, electric vehicles, and renewable energy storage. energy storage.

Producing lithium batteries involves several stages, from extracting lithium compounds from the ore to manufacturing the battery cells and packs. It's a technologically complex process that requires expertise in materials science, chemistry, engineering, and manufacturing.

If TTU successfully establishes a lithium battery production facility, it could contribute to local economic growth, job creation, and technological advancement.

Here are a few points to consider regarding this initiative:

1. Resource Utilization: The discovery of lithium ore provides an opportunity for the region to harness its natural resources and diversify its economic activities beyond traditional industries.

2. Research and Development: TTU's Faculty of Engineering would likely need to invest in research and development to optimize the lithium extraction process and battery manufacturing techniques. This could lead to advancements in both academic and industrial knowledge.

3. Partnerships: Collaborations with industry partners, research institutions, and government bodies could enhance the project's success. Partnerships might involve sharing knowledge, expertise, and resources, as well as ensuring compliance with environmental and safety regulations.

4. Skills Development: The initiative would require skilled professionals in various fields, such as materials science, chemical engineering, electrical engineering, and quality control. TTU could play a crucial role in training the next generation of experts in these areas.

5. Environmental Considerations: Lithium mining and battery production can have environmental impacts. It's important for TTU to consider sustainable and responsible practices throughout the entire value chain, from mining to the disposal or recycling of batteries.

6. Market Potential: As the demand for lithium batteries continues to grow due to the increasing adoption of electric vehicles and renewable energy solutions, TTU's venture into lithium battery production could position it well in the market.

7. Challenges: Establishing a lithium battery production facility is a complex endeavor that involves technological, financial, and logistical challenges. TTU would need to carefully plan and address these challenges to ensure the project's success.

8. Economic Impact: If successful, the project could contribute to job creation, revenue generation, and economic development in the region.

Overall, TTU's intention to leverage the discovery of lithium ore for lithium battery production is an exciting prospect that aligns with technological advancements and global trends.

It demonstrates the university's commitment to innovation and could have positive effects on both the local economy and the academic community.

Now to the hard facts………………

Bloomberg NEF has conducted a study titled “The Cost of Producing Battery Precursors in the DRC” in the lead-up to the DRC-Africa Business Forum. The objective of the study is to determine the cost of producing lithium-ion battery precursors in the Democratic Republic of Congo (DRC) and benchmark the cost to that of the U.S., China, and Poland. In addition to the cost, the study assesses the emissions associated with the production of precursors in the DRC for the global electric vehicle market compared with producing them in China and Poland. 

Kyzzfmonline provides an extract of the report covering the key findings as well as the policy implication for Ghana and the role of Takoradi Technical University…….

Key findings

African countries could play a key role in the lithium-ion battery supply chain. Electric vehicles represent a $7 trillion market opportunity between today and 2030, and $46 trillion between today and 2050.

While there are notably leading electric vehicles and cell manufacturers today, the sheer scale of growth expected in the coming decades means that there is inherent uncertainty over which companies and countries may come to dominate this new value chain.

African countries could play a key role in the lithium-ion battery supply chain. Electric vehicles represent a $7 trillion market opportunity between today and 2030, and $46 trillion between today and 2050.

Electrification of two-and three-wheelers could be a big opportunity for Africa. Two-and three-wheeler sales are growing rapidly in countries such as India, Vietnam, and Indonesia.

Increasing population, GDP per capita, and urbanization in Africa and other parts of the world will help drive global sales of two-and three-wheeler sales up from 88 million in 2020 to 114 million in 2040 in Bloomberg NEF’s long-term outlook. Electric vehicle adoption is also growing fast in this segment, where some 44% of new two-and three-wheelers sold globally in 2020 were electric models.

Annual lithium-battery demand will grow rapidly, topping 4.5 terawatt-hours (TWh) annually by 2035. Meeting this demand requires unprecedented but achievable increases in metals, precursor, and cell production. By 2025, there will be over 3TWh of nameplate cell manufacturing capacity, if manufacturers successfully execute their growth plans.

Total metals demand from lithium-ion batteries will reach 13.5 million metric tons by 2030. Overall cobalt demand from the lithium-ion industry will grow 1.5 times between 2021 and 2030. Nickel, used in the cathode, will see demand grow to about 1.4 million metric tons by 2030, five times that of 2021.

Annual demand from the lithium-ion battery industry for copper will reach 3.9 million tons by 2030 while aluminum will reach 3.1 million tons, with market size for both metals growing six times over that period.

Total metals demand from lithium-ion batteries will reach 13.5 million metric tons by 2030.

Bloomberg NEF expects the nickel-manganese-cobalt oxide (NMC) 622 and NMC 811 battery chemistries to be prevalent in passenger electric vehicles in Europe this decade.

Most European original equipment manufacturers (OEMs) have announced their reliance on high nickel chemistry batteries, for performance applications, although they will use lithium-iron-phosphate (LFP) for low-cost entry-level vehicles.

It would be more practical for the DRC. to produce precursors that would ultimately have commercial value in its most dependent market, Europe, as Africa works toward building its domestic demand.

Building a 10,000 metric-ton precursor facility in the DRC could cost $39 million. This is three times cheaper than what it would cost for a similar plant in the U.S. A similar project in China and Poland will cost $112 million and $65 million, respectively. The capital cost in the DRC is cheaper than all three countries mainly due to the lower cost of land and construction of the project (Figure 1 and Figure 2).

Operating a 10,000 metric tons precursor facility in the DRC that procures cobalt at cost (integrated scenario) from a captive mine is the most cost competitive, compared to a similar plant in the U.S., China, and Poland. Operating in the DRC becomes more expensive than in Poland once the plant has to procure its cobalt at spot prices (non-integrated) (Figure 3 and Figure 4).

An optimal mix of concessional loans, development funds, private debt, and equity could maximize the project's net present value (NPV). At an interest rate of 8.5% and a theoretical precursor price of $32/kg, the project NPV is $11 million, as shown in Figure 5.

The project NPV increases to $20 million at a 5% interest and rises further to $26 million at a 3% interest rate. This shows that high-interest rates could increase total project costs.

Working with development finance institutions on adding a tranche of concessional financing – debt at a discounted rate compared to typical market rates – could significantly reduce the cost of borrowing. However, over-reliance on concessional loans could crowd out investment from private lenders.

The project partners indicated their interest in developing a 100,000 metric-ton capacity precursor plant in the DRC using Bloomberg NEF’s top-down approach, we estimate a 100,000 metric tons precursor plant built in the DRC could cost $301 million.

A 100,000 metric-tons-per-annum NMC (622) precursor plant will require 16,000 metric tons of cobalt annually as well as 48,000 metric tons and 15,000 metric tons of nickel and manganese, respectively.

Building a 10,000 metric-ton precursor facility in the DRC could cost $39 million. This is three times cheaper than what it would cost for a similar plant in the U.S. A similar project in China and Poland will cost $112 million and $65 million, respectively.

Producing the precursors in the DRC for packs assembled in Salzgitter, Germany, and cells manufactured in Nysa, Poland will reduce the life-cycle emissions of cells by 30% compared to making the precursors in China, and 9% compared to making them in Poland. This is due to the DRC’s proximity to some cathode raw materials and relatively clean grid.

Policy implications

Countries in Africa especially Ghana must create a diversified capital market that supports battery research, early-stage products, and the scale-up of manufacturing for the electric vehicle industry. Development finance institutions such as the AfDB and BADEA can support research and early-stage projects through grants.

Also, institutions such as Afrexim Bank and the AFC can complement commercial banks by providing loans to mature companies to support expansion, whilst the ALSF can provide legal support for business transactions.

Ghana must formulate policies such as zero-emissions vehicle subsidies, emissions regulations, and consumer incentives to boost demand for electric vehicles in order to attract cell manufacturing capacity to the continent.

Ghana must upgrade its infrastructure, from electricity, roads, ports, and rail to electric vehicle charging ports, to support low-cost manufacturing and integration of electric vehicles.

In line with setting up the precursor manufacturing plant, Ghana must also develop a research center using the existing structures at TTU to invest in next-generation battery technology to support the budding industry and to also train the local workforce.

Government must promote fiscal certainty through the provision of laws and regulations that support local businesses.

The government could also create specialized economic zones with a focus on the electric-vehicle industry, with a clear mandate to protect investment capital, guarantee business continuity and lower the risk of operating business in the country.

The government could set up a one-stop shop to coordinate and streamline engagement with third-party organizations.

This will improve transparency and reduce the red tape associated with activities such as licensing, permitting, and intellectual property negotiations. This could either be through a joint venture between the state, TTU, and its strategic partners or a special-purpose vehicle.