Solar PV Development Presents Opportunities for Ethiopia’s Copper Exports

Author

Lexi

Code 
library(tidyverse)
library(readxl)
library(here)

path_to_sheet <- here("data-raw", "CM_Data_Explorer.xlsx")

read_solar_sheet <- partial(
  .f = read_excel,
  path = path_to_sheet,
  sheet = "2.1 Solar PV",
  col_names = FALSE
)

sheet_header <- read_solar_sheet(range = "A4:W5")

sheet_header_processed <- sheet_header |> 
  t() |>
  as_tibble() |>
  rename(scenario = V1, year = V2) |>
  fill(scenario) |>
  replace_na(list(scenario = "Current Year"))

solar_type <- read_solar_sheet(range = "A7") |> 
  pull()

mineral_info <- read_solar_sheet(range = "A8:W23")

mineral_info_col_names <- names(mineral_info)

sheet_headers_and_col_names <- sheet_header_processed |> 
  add_column(mineral_info_col_names = mineral_info_col_names)

mineral_info_long <- mineral_info |> 
  rename(mineral = `...1`) |> 
  pivot_longer(cols = -mineral,
               names_to = "mineral_info_col_names") |> 
  add_column(solar_type)

combined_data <- mineral_info_long |> 
  left_join(sheet_headers_and_col_names, by = join_by(mineral_info_col_names)) |>
  filter(!is.na(year)) |>
  mutate(
    year = as.integer(year)
  ) |> 
  select(solar_type, mineral, scenario, year, value)

read_iea_solar_table <-
  function(solar_type_range, mineral_info_range) {
    solar_type <-
      read_solar_sheet(range = solar_type_range) |>
      pull()
    
    mineral_info <- read_solar_sheet(range = mineral_info_range)
    
    mineral_info_col_names <- names(mineral_info)
    
    mineral_info_long <- mineral_info |>
      rename(mineral = `...1`) |>
      pivot_longer(cols = -mineral,
                   names_to = "mineral_info_col_names") |>
      add_column(solar_type)
    
    combined_data <- mineral_info_long |>
      left_join(sheet_headers_and_col_names, by = join_by(mineral_info_col_names)) |>
      filter(!is.na(year)) |>
      mutate(
        year = as.integer(year)
      ) |>
      select(solar_type, mineral, scenario, year, value)
    
    combined_data
  }

cdte_table <- read_iea_solar_table(
  solar_type_range = "A7",
  mineral_info_range = "A8:W23"
)

gaas_table <- read_iea_solar_table(
  solar_type_range = "A26",
  mineral_info_range = "A27:W42"
)

perovskite_table <- read_iea_solar_table(
  solar_type_range = "A45",
  mineral_info_range = "A46:W61"
)

base_table <- read_iea_solar_table(
  solar_type_range = "A64",
  mineral_info_range = "A65:W80"
)

final_iea_solar_table <- cdte_table |> 
  bind_rows(gaas_table) |> 
  bind_rows(perovskite_table) |>
  bind_rows(base_table)

write_csv(final_iea_solar_table,here("data", "iea_total_demand_for_critical_minerals.csv"))

Executive Summary

  • Copper stands as the most in-demand critical mineral for Solar PV Development

  • Copper demand peaks in 2030-2040 under net zero emissions by 2050 scenario

  • Ethiopia’s copper trade with China shows significant market potentials

Ethiopia’s copper export

  • The malachite ore in Kola Tembein, Tigray, Ethiopia is an important source of copper production, making the country one of the few copper exporters in Africa.

  • Ethiopia exported 1.19 million kilograms of copper to the world in 2022 and generated significant economic benefits that contributed to the alleviation of poverty.

  • As solar photovoltaic (PV) technology matures and becomes an important renewable source in power generation, Ethiopia shall seize the opportunity to grow the value of its copper export and improve its term of trade.

Copper stands as the most in-demand critical mineral for Solar PV Development

  • Copper and silicon stand as the two most important raw materials for solar PV products, comprising 97% of the total demand for critical minerals.

  • Copper demand is anticipated to reach 1880 kt in 2050, accounts for 56% of the future demand, and will further increase with the wider adoption of Cd-Te technology, Ga-As technology, or perovskite solar cells.

  • As the world shifts towards renewable energy sources to achieve the net zero emissions goal, increasing investments in solar PV presents promising opportunities for copper exporters as Ethiopia to cultivate economic gains and play a significant role in the global energy transition.

Code 
donut <- final_iea_solar_table |>
  filter(scenario == "Net Zero Emissions by 2050 scenario",
         solar_type == "Base case",
         year == "2050",
         mineral != "Total solar PV")

others_value <- sum(donut %>% 
                    filter(!mineral %in% c("Copper", "Silicon")) %>% pull(value))

others_donut <- data.frame(mineral = "Others", value = others_value)

donut_final <- donut %>% 
  filter(mineral %in% c("Copper", "Silicon")) %>% 
  bind_rows(others_donut)

donut_final$rounded_value = 
  sprintf("%.0f", donut_final$value)

donut_final$fraction = 
  donut_final$value / sum(donut_final$value)

donut_final$ymax = 
  cumsum(donut_final$fraction)

donut_final$ymin = 
  c(0, head(donut_final$ymax, n=-1))

donut_final$label_position <- (donut_final$ymax + donut_final$ymin) / 2

donut_final$label <- paste0(donut_final$mineral, 
                            "\n", 
                            donut_final$rounded_value)

ggplot(donut_final, aes(ymax=ymax, ymin=ymin, xmax=4, xmin=3, fill=mineral)) +
     geom_rect() +
     geom_label(x=3.5, aes(y=label_position, label=label, size=6)) +
     scale_fill_brewer(palette=4) +
     coord_polar(theta="y") +
     xlim(c(1, 4)) +
     labs(
     x = "Year",
     y = "Kiloton (kt)",
     title = "Critical Mineral Demand for Solar PV (kt)",
     subtitle = "Copper stands as the most in-demand critical mineral",
     caption = "Source: IEA | Insight: Lexi") +
     theme_void() +
     theme(legend.position = "none")

Copper demand peaks in 2030-2040 under net zero emissions by 2050 scenario

  • Assuming that governments are taking more concrete steps to align their policies with the net zero emissions goal in the coming years, copper demand for solar PV will drastically increase by 58% from 1259 kt in 2025 to 1991 kt in 2030, peak and level off at around 2000 kt in 2030-2040, and fall after 2040.

  • As a copper exporter, Ethiopia should invest more in copper production and infrastructure construction around the Kola Tembien area in the near future in order to boost copper export as the demand peak comes.

Code 
final_iea_solar_table$scenario <- 
  factor(final_iea_solar_table$scenario, 
         levels = c("Stated policies scenario", 
                    "Announced pledges scenario", 
                    "Net Zero Emissions by 2050 scenario"))

final_iea_solar_table %>%
 filter(mineral %in% "Copper") %>%
 filter(!is.na(scenario)) %>%
 ggplot() +
  aes(x = year, y = value, colour = scenario) +
  geom_line() +
  scale_color_hue(direction = 1) +
  labs(
    x = "Year",
    y = "Kiloton (kt)",
    title = "Scenario Analysis of Copper Demand for Solar PV",
    caption = "Source: IEA | Insight: Lexi",
    color = "Policy Scenario"
  ) +
  theme_minimal() +
  theme(legend.position = "top")

Ethiopia’s copper trade with China shows significant market potentials

  • China is the single largest importer of Ethiopian copper, far outstripping other importers such as India and South Africa.

  • In 2022, Ethiopia exported a record 1 million kilograms of copper to China, accounting for 86% of it total copper exports.

  • As the the largest manufacturer of solar PV in the world, China will keep enpanding its copper imports as solar PV develops, which opens up a even larger market potential for Ethiopia’s reciprocal copper trade with China.

Code 
ethiopia_sheet <- read_csv("data-raw/Ethiopia Copper Export.csv") |>
  select(Period, PartnerDesc, Fobvalue) |>
  filter(Period == "2022", PartnerDesc != "World") |>
  arrange(Fobvalue |> desc()) |> 
  slice_head(n = 5)

ethiopia_sheet %>%
 ggplot() +
  aes(x = fct_reorder(.f = PartnerDesc, .x = Fobvalue |> desc()), y = Fobvalue) +
  geom_col(fill = "lightblue", width = 0.5) +
  labs(
    x = "Import Country",
    y = "Kilogram (kg)",
    title = "Ethiopia's Major Copper Export Destinations",
    subtitle = "China is the single largest importer of Ethiopian copper",
    caption = "Source: UN | Insight: Lexi") +
  theme_minimal()

Conclusion

  • The global energy transition, featuring the wider adoption solar PV, presents new market opportunities for Ethiopia’s copper exports, given its copper resources and long-term trade partnership with China.

  • Both the public and private sectors in Ethiopia should consider investing in raw copper production and, on that basis, developing manufacturing capacity for copper-based intermediate goods of solar PV, in order to move up along the value chain and maximize the economic benefits derived from copper resources.