Consolidating SA’s Position as a Regional Mineral Hub

gigafactory.

Energy Capital & Power spoke with Deshan Naidoo, AQORA’s Managing Director, about the significance of the project and how the facility will pave the way for a more sustainable future in South Africa.

AQORA is currently assessing the feasibility of a vertically integrated Gigafactory in South Africa. What is the significance of a project of this kind and what influenced your decision to develop a Gigafactory in South Africa?

This is arguably one of the most important large scale private sector projects on the continent. Countries are rapidly transitioning to new energy generation and this generation requires battery storage. Africa has notable deposits of minerals required for battery manufacturing, in relatively close proximity.

Our decision to set up in South Africa is premised on the depth of local manufacturing expertise, trade policy and investment incentives and proximity to key battery mineral deposits. Further, South Africa is the most industrialized country on the continent and this project can cement this position whilst providing a significant employment multiplier, specifically in the Eastern Cape, the region with the highest unemployment rate.

Please describe the key components of the Gigafactory and their respective roles in the production process? How does the company plan to address challenges related to sourcing raw materials and managing the supply chain? 

A high-level process map includes mining of raw ore, processing the ore to concentrates, refining to battery precursors, the formation of anodes and cathodes, finally leading to cell and battery pack assembly.

By leveraging our group mining assets, consisting of significant battery mineral deposits and other mining relationships, we are able to ensure long term supply of raw material, at favorable pricing. Further, our international technology and logistics partnerships, as well as public sector support will ensure that we contribute to the region’s just transition.

What role will a project of this nature play in southern Africa’s energy transition and how will the project consolidate the country’s position as a critical mineral hub?

This project plays a pivotal role in the region’s energy transition. By producing components and cells locally, AQORA will support intra-continental trade, job creation, skills development and importantly beneficiation, while acting as a catalyst for new downstream industries.

Is there a big demand for lithium-ion batteries in southern Africa?

Recent analysis shows that South Africa’s importation of lithium-ion batteries and cells is more than R12 billion per annum, this is almost three times the value of imports in the previous year. Given domestic base load constraints, this trajectory is only expected to continue.

What is the EV market outlook in southern Africa currently and do you foresee an uptick in EV demand going forward?

My personal opinion is that we are far away from mass adoption of new energy vehicles (EV) in Southern Africa. There are a multitude of interdependent factors that need to be aligned for this to happen. Currently, the price point of EVs are prohibitive to the mass market, and policies to incentivize consumer demand do not exist. Our focus as AQORA is on the stationary applications and export opportunities for Lithium-Ion batteries.

What will the financing structure look like for the project and what message do you have for potential investors?

We are currently in the capital raising process. We envisage a blended solution, leveraging developmental financing, sovereign wealth funds and commercial banks. We invite interested parties to reach out, we need all the help we can get to get this giga-project to fruition.

Energy Capital & Power is organizing the first-ever Critical Minerals Africa Summit in Cape Town from 17-18 October 2023, uniting key producers and users of the mineral resources that underpin modern technologies, supply chains and energy production, with special focus on the energy transition. The role of projects such as AQORA’s vertically integrated Gigafactory will be explored while potential investment opportunities showcased to a suite of international investors. Contact Senior Director James Chester at james@energycapitalpower.com / +27 606754850 for information about participating in the summit.

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Onur Yilmaz

Onur Yilmaz

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