There are a number of opportunities for South Africa to capitalise on in terms of both the more established lithium-ion battery (LIB) industry and the emerging vanadium redox flow battery (VRFB) industry, and this requires expeditious actions in terms of policy frameworks, proper strategies for each part of the value chain and internal collaboration, as well as collaboration with regional stakeholders.

This was outlined by speakers during the Development Dialogue: Building a Local Battery Industry webinar hosted by Trade and Industrial Policy Strategies (TIPS) on October 18.

It was highlighted that the country is well positioned to capitalise on opportunities presented by the battery value chain, given its considerable production and reserves of battery materials.

TIPS senior economist Lesego Moshikaro-Amani pointed out that the country boasted a vibrant LIB value chain; however, not all stages were at the same level of development.

She emphasised the need to identify where South Africa was, or could be, competitive.

Beyond mining of the resources needed for these technologies, Moshikaro-Amani said there were two pathways – developing battery manufacturing and mineral refining, with these poised to be scaled up in the country.

She also noted that cell manufacturing and recycling were areas that could be explored in the medium to long term, provided that they proved to be competitive and economically sustainable.

These points come from previous research conducted by TIPS in 2020: 'Opportunities to develop the LIB battery value chain in South Africa'.

Speakers also emphasised the opportunities presented by VRFBs. Bushveld Energy CEO Mikhail Nikomarov pointed out that, unlike LIBs, which had seen good growth in the past two years, the VRFB industry was nascent and therefore, the country could still capitalise on the opportunity to enter the market.

However, he emphasised that the window of opportunity was small and that the country had to act quickly to ensure it did not lose out to competing countries.  

Moshikaro-Amani said the country could benefit from the fact that it had the largest high-quality vanadium reserves, and pointed out that the industry in the country needed support to bolster localisation.

She highlighted that financial assistance, combined with development finance institutions and private financing, could boost access to funds for developing the VRFB value chain.

Moshikaro-Amani highlighted that the manufacturing of VRFB balance-of-parts components and battery pack assembly were areas that could be readily localised.

She emphasised the need to evaluate the feasibility of localising core components.

Echoing Nikomarov, she said that, while the local industry was still in its initial phases, electrolyte manufacturing was strategically positioned to integrate into global value chains.

Speakers also noted that demand would also come from the rest of Africa and there was a need to collaborate with regional stakeholders given that many areas in the continent would have the resources required for these energy storage systems.

Nikomarov added that the demand from South Africa was being understated, with the country actually recently becoming one of the largest in terms of residential energy storage demand. He averred that this, coupled with demand from the rest of the region, should not be missed out on.

There would also be demand from other countries, with the global vanadium battery market projected to grow, and therefore, the country required both funding and a proper policy framework to bolster the VRFB industry, Moshikaro-Amani emphasised, pointing out that the industry had grown despite a lack of government support.

She said this support would allow the industry to scale up to meet domestic demand, as well as ready itself for the export market.

Moshikaro-Amani added that a proper framework would provide assurance for investors providing capital in emerging technologies.

These points outlined by Moshikaro-Amani come from TIPS’ research this year: 'Localising vanadium battery production for South Africa's energy security'.

Meanwhile, Industrial Development Corporation of South Africa (IDC) senior industry specialist Kgashane Mohale outlined that the entity was undertaking a segmented approach to the battery value chain. He emphasised the importance of ensuring that each segment was independent, given that each contained considerable moving parts.

These segments are mining and beneficiation, refining, active material, cell manufacture, pack assembly, application and recycling.

Balancell CEO Ian de Vries said the country had everything it needed to manufacture completed batteries, up to gigawatt capacity, and even the avenue of inputs into the automotive market. However, challenges arose in doing this competitively, and therefore, he said that investment should presently be focused on value-add and recycling.