Morocco's pivotal role in the electric vehicle battery trade

Morocco has emerged as a significant hub for large-scale Chinese investments in electric vehicle battery production, prompting critical discussions about its potential for genuine industrialization versus its position as a pawn in the geopolitical rivalry between China and the West.

In a recent analysis published by the Transnational Institute, Moroccan researcher Ali Amouzai explores how Morocco has strategically positioned itself in the global competition for critical minerals essential to the green energy transition. These minerals are particularly vital for electric vehicle batteries.

“Morocco has become a prime destination for large-scale investments in the refining of strategic and critical minerals used in the production of electric vehicle batteries, with Chinese companies leading the charge,” Amouzai asserts in his paper titled “Critical raw minerals in Morocco: An opportunity for industrialization or a geopolitical battlefield between China and the West?”

This analysis arrives as several prominent Chinese battery manufacturers have announced investments totaling billions of dollars within Morocco. Notably, in September 2023, CNGR revealed a $2 billion plan to establish a significant manufacturing base in Jorf Lasfar, collaborating with the Moroccan royal family’s investment group, Al Mada. Earlier, in June, the Chinese-German firm Gotion High-Tech signed a $6.4 billion agreement to build Africa’s first electric vehicle battery factory in Bouknadel, near Rabat, anticipated to have a production capacity of approximately 100 gigawatt-hours per year.

Amouzai highlights that these investments are not merely economic ventures but part of China's broader strategy to navigate trade restrictions. The ongoing US–China trade war and the resulting geopolitical tensions, particularly after President Joe Biden’s announcement of the Inflation Reduction Act, have necessitated that China seek partnerships with countries that have free trade agreements with the United States. Morocco, with its agreement in place, presents a pathway for Chinese manufacturers to qualify for US subsidies, thereby facilitating what experts term “friends-shoring.”

The paper points out Morocco's notable position in the global mineral market, ranking ninth in cobalt production and eleventh in cobalt reserves, making it Africa’s second-largest producer after the Democratic Republic of Congo. Furthermore, Morocco boasts 70% of the world’s phosphate reserves, a key component in the production of cost-effective electric vehicle batteries.

While the Moroccan government touts these investments as transformative for the nation’s economy and industrial development, Amouzai raises pertinent questions regarding their actual benefits. For instance, former Investment Minister Jazouli announced that Gotion High-Tech would create 30,000 jobs over a decade; however, Amouzai suggests these projections may be inflated.

“Permanent employment is essential for a fair green transition, yet Morocco’s recent job creation has often relied on outsourcing and subcontracting,” he states. He further clarifies that major projects, such as renewable energy facilities, are typically capital-intensive, offering employment primarily during construction phases, with limited high-skilled positions remaining afterward.

The paper posits that Morocco’s strategy of integrating into global capital networks and exploiting rivalries among major powers may enhance its standing within the contemporary international division of labor, but it will not lead to true industrialization. “Morocco remains a small economy, ranking sixth in Africa in GDP, primarily reliant on agriculture and raw material extraction,” Amouzai notes.

He challenges the optimistic narrative surrounding these investments, arguing that Morocco’s dependence on foreign capital is evident in the frequent references to “sovereignty” in state documents. The researcher asserts that the monarchy’s role as a guarantor of political stability in a region fraught with tensions compromises prospects for genuine technological transfer and industrial independence.

Amouzai also critiques the environmental implications of these investments, arguing that the primary objective of Moroccan capital and the state’s adoption of green rhetoric is to secure international green funds and facilitate access to the European market. He highlights that Chinese companies may prefer Morocco to avoid stringent European environmental regulations, citing the expedited permitting process as a significant advantage.

In conclusion, Amouzai advocates for a green industrialization policy that prioritizes local demand over the current export-driven strategy. He calls for public industrial initiatives, a focus on domestic energy requirements, urban planning reforms, and enhanced cooperation across the Maghreb region. “Energy, irrespective of its source, can contribute to building a greener and more socially just future for Morocco, but it cannot be divorced from the global economic structure, social frameworks, and the various forms of oppression embedded within them,” he concludes.