China is considering investing in Algeria to the tune of $36bn. At least, that’s what Abdelmadjid Tebboune declared during his visit to Beijing and Shenzhen from 17-21 July.
Accompanied by a significant delegation of business leaders and ministers, including Industry Minister Ali Aoun, the Algerian president highlighted “enormous and mutually beneficial agreements for both countries”.
Among the standout announcements of this visit: Xi Jinping’s intent to establish “one of the largest lithium battery factories” in Algeria, as reported by the Algerian official news agency APS.
While no specific details have been disclosed about this project, neighbouring Morocco, which is hoping to become the hub of the electric battery industry in Africa, is closely monitoring the situation.
Towards the end of May, the Moroccan Investment and Export Development Agency (AMDIE) signed a memorandum of understanding with the Sino-European conglomerate Gotion High-Tech, aiming for “the establishment of an industrial ecosystem for electric vehicle batteries and energy storage systems”, with a budget of 65bn Moroccan dirhams ($6.6bn).
A month later, Moroccan firm Tinci Materials Technology, specialising in lithium-ion battery materials, also announced a $280m investment in the kingdom.
Morocco’s mineral assets
“Progress is being made in the right direction. Due to the strategic nature of the matter, we cannot divulge more at this moment,” stated Ryad Mezzour, Morocco’s Minister of Industry, in a recent interview.
A highly placed source within the Aziz Akhannouch government has also assured Jeune Afrique that “negotiations are ongoing with several major Chinese conglomerates for the establishment of a gigafactory”.
She added: “We have all the elements to attract these investments and create an ecosystem in the sector, similar to what we’ve achieved in the automobile and aerospace industries”.
In this race between the two rival countries for this nascent industry, the kingdom holds a significant asset: it possesses 70% of the global reserves of phosphate. “Phosphate-based LFP [lithium, iron, phosphate] batteries are cheaper, safer, and have a longer lifespan compared to their cobalt-based counterparts. The increasing use of LFP batteries positions Morocco favourably in electric vehicle battery production,” says the Middle East Institute in a report published last August.
As for cobalt, a highly sought-after mineral in electric battery production, Morocco also holds the advantage of being the world’s ninth-largest producer, yielding around 2,000 tonnes annually.
Managem, a mining subsidiary of the royal Al Mada group, signed an agreement in 2022 to supply Renault, the automobile manufacturer, with 5,000 tonnes of cobalt sulfate for electric battery production, spanning seven years starting in 2025. The two companies have also committed to building a plant to transform cobalt into cobalt sulfate.
“Morocco’s automotive ecosystem also strengthens its case, as its transition to electric vehicles presents an opportunity for numerous investors,” says Nasser Bouchiba, president-founder of the Africa-China Cooperation Association for Development (ACCAD).
Mezzour is no stranger to the sector, having graduated from the Swiss Federal Institute of Technology in Zurich and worked for the ABB group, a world leader in energy and automation technologies, as well as managing Suzuki Morocco.
Well before the recent announcements, Moulay Hafid Elalamy’s former chief of staff said in 2022 his department was in negotiations with “five operators on three continents (America, Europe and Asia) for the installation of an electric battery factory”.
Algiers and Beijing on good terms
On his side, Ali Aoun can leverage the strength of robust economic relations with Beijing, exemplified by Chinese exports projected to reach nearly $8bn in 2023.
As Algeria’s top supplier with a 17% market share, China invested approximately $24bn between 2005 and 2020, according to data from the China Global Investment Tracker by the American Enterprise Institute.
However, a recent report from the Arab Institute of Business Leaders indicates that Beijing’s favoured sectors primarily revolve around transportation and real estate.
“In the electric battery sector, the most important aspect of a partnership is knowledge transfer, ensuring that engineers, technicians, and a portion of the workforce receive training. For instance, when CITIC Dicastal established its wheel factory in Kenitra, it sent 600 Moroccan employees to China for training. Yet, in the partnership with Algeria, no such initiative seems evident,” says Bouchiba.
Ali Aoun can also exploit his country’s political proximity to China, whose president has openly supported Algeria’s bid for membership in the BRICS (Brazil, Russia, India, China, and South Africa).
“It’s important to remember that Chinese businessmen are highly pragmatic. They invest based on their interests, not the nature of a regime,” says the sinologist, who has spent over 20 years in China.
In this regard, the Moroccan government, equipped with a new investment charter, is actively courting new investors, offering “direct incentives of up to 30% of the total invested amount,” said Investment Minister Mohcine Jazouli in a recent statement.
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