Martiena Biene, the managing director of Volkswagen Group South Africa and president of the newly formed policy lobby Association of Automotive Manufacturers (AAM), delivered a compelling address at during a panel session at Mining Indaba. Biene drew attention to the symbiotic relationship between the mining and automotive industries, specifically the crucial role the mining sector plays in underpinning the success and sustainable growth of the automotive industry in Africa.
“Today, I not only speak as the chairperson and managing director of Volkswagen Group in Africa, but I also represent the African automotive industry in my capacity as the president of the Association of Automotive Manufacturers, called AAM,” she began.
Biene spoke of the interconnectedness of the mining and automotive industries, describing them as integral to South Africa’s success.
“As you see, I’m not from the mining industry, but I am here to talk about future-proofing the mining industry in relation to the downstream buyer.”
Biene’s definition of “futureproofing” Africa’s mining industry involves ensuring a consistent, sustainable, and ethical supply of raw materials and metals.
She maintains that reliable supply is essential for various downstream industries, including automotive, electronics, and construction.
Mining industry can support GDP
“Futureproofing Africa’s mining industry means downstream buyers from various industries, like the automotive industry, electronic, and construction, can benefit from consistent, sustainable, and ethical supply of raw materials and metals, which are essential to these industries,” she explained.
The local automotive industry accounts for around 5% of the country’s GDP.
“We all wish it grows higher year by year, and we heavily rely on a range of raw materials that are sourced through mining,” she stated.
As the automotive industry evolves, particularly with the rise of electric vehicles, the mining sector’s importance becomes even more pronounced.
Critical minerals and metals are required for automotive manufacturing, including steel, aluminium, copper, lithium, cobalt, and nickel.
The mining industry can benefit the automotive industry through a reliable supply of essential minerals and metals, like steel, which is a primary material for car bodies and components made from iron ore, like aluminium, which is used in engines, wheels, and body panels to reduce vehicle weight and improve fuel efficiency, copper, which is key for electrical wiring, motors, and batteries, and with the rise of electric vehicles, lithium, cobalt, and nickel, which is essential for batteries.
Localised supply chains
Biene also pointed out the economic benefits of a well-regulated and efficient mining sector, which she says can help stabilise the price of key raw materials, providing more predictable costs for automotive manufacturers.
“Volatility in the prices of materials like lithium or steel can affect the production costs of vehicles, especially as automakers invest in electric vehicle platforms,” she explained.
Localising critical supply chains is another significant advantage with a robust mining sector near automotive manufacturing regions driving down transportation costs and minimising supply chain risks.
“Automotive manufacturers can rely on local or regional mining operations to meet their needs for raw materials, enhancing efficiency and supply chain flexibility,” Biene said.
Free trade agreement
One of the key initiatives Biene discussed is the African Continental Free Trade Agreement and its impact on the automotive industry.
“The African Continental Free Trade Agreement, with automotive being one of the four key pillars, and the Rules of Origin, which means African content, hopefully soon be concluded also for automotive, of 40% African content in African cars, provides a huge opportunity,” she said.
Biene stressed the importance of localising the processing industry to maximise the benefits of Africa’s mineral wealth.
She cited the example of the PGM process in South Africa, which successfully localised the supply chain from mining to OEMs, creating new industries, jobs, and independence from international suppliers.
“Approximately 80% of global raw material refinery, and you know that better than I, is in the East. It is a great opportunity for Africa to benefit our minerals locally,” she said.
Africa for the world
She spoke highly of the role of government support in these initiatives and how Volkswagen Group has leveraged such support for business value.
“So we supply from here also to the group, and not only Africa for Africa, but Africa for the world,” Biene stated.
“With collaboration between government and industries, this model can be copied for other manufacturing processes, like precursor materials for copper cathode and battery cells, nickel, cobalt, manganese, and lithium, and the copper I already mentioned for wiring harnesses.”
The synergy between Africa’s mining and automotive sectors presents a promising path for sustainable growth, innovation, and economic development.
With strategic collaboration and localised efforts, the continent stands to gain significantly, ensuring a prosperous future for both industries.
