What Better Looks Like: Breaking the Critical Minerals Resource Curse

This piece originally appeared in New Security Beat

By Claire Doyle

In recent years, the urgency of climate action has brought fresh attention to the critical minerals sector. Growing renewable energy investments are driving up demand for resources like lithium, cobalt, and copper, which form the mineral backbone of green technologies. But there are substantial concerns to navigate when it comes to sourcing green energy minerals.

“There’s a risk that in our modern-day mineral rush, without meaningful efforts to do better in the mining sector, there will be casualties,” warned Lauren Risi, Director of the Wilson Center Environmental Change and Security Program, at a recent Wilson Center event on critical minerals, co-hosted by USAID. “The mining industry has a long history and not necessarily a particularly good one,” said Sharon Burke, Founder and President of Ecospherics and Global Fellow at the Wilson Center.

Given the grim legacy of human rights and conflict risks associated with mining, the energy transition presents an opportunity—and a moral imperative—to pursue new approaches to extraction. “We’re already living in a climate stressed world, so we need to make sure that our solutions here in extracting materials for energy transition don’t do greater harm,” said Aimee Boulanger, Executive Director of the Initiative for Responsible Mining Assurance.

What, then, does better look like for mining? The answer requires reflection and action in all sectors of society and levels of governance. “Better is what we all need to be striving for, whether we’re donors, governments, civil society, or the private sector,” noted Kimberly Thompson, Senior Advisor at USAID.

Yet views of “better” likely will vary among stakeholders “It depends on who you ask,” said Boulanger. “An Indigenous community pressed to the edge, trying to protect what little cultural heritage is left, or a community living downstream of a tailings dam is going to have a different definition of what is good compared to end brands who are giving us the products that we use each day and the mining companies who are striving to supply them.”

Strengthening Community Participation and Benefit-Sharing

Local stakeholders are crucial partners in shaping what “better” looks like, said Amayèle Dia, Senior Protection Program Office at the INGO Pact. From community members and organizations to local government structures, these stakeholders determine whether companies have the social license to operate. But they’re too often seen as a secondary stakeholder, she added, and their views, opinions, and concerns aren’t always taken into account. Exclusion from dialogue opens the door to both problematic mining concessions and human rights violations (like child labor) if communities are left with unmet needs.

To combat child labor in the Democratic Republic of the Congo (DRC), where roughly 45,000 children are involved in cobalt mining alone, Pact developed the Children Out of Mining Project. The initiative created an apprenticeship program to help adolescent miners find alternative employment as a response to observations made by a local development committee in the region’s copper-cobalt belt. Using a community-based model and local know-how, the program provides training in automotive mechanics, welding, carpentry, hairdressing, tailoring, and other trades. Since its inauguration close to 10 years ago, it has served several hundred young people in DRC.

Mitigating risks like child labor in the first place, however, requires stronger benefit sharing and up-front community participation in mining decisions. Communities must be involved “to ensure that critical minerals provide tangible [local] benefits” said Dia, citing economic opportunities, sustainable livelihoods, the development of infrastructure in education or health, and access to clean drinking water, among other examples.

Boulanger agreed that the best approach to mining involves working directly with communities. “Without community,” she observed, “we do not have security of supply.”

Recognizing “Hidden Suppliers” and Promoting International Standards

Dia said that another key group also merits greater attention. Artisanal and Small-scale Mining (ASM) operators number about 45 million across 80 countries and produce a sizable portion of global gold, tin, and cobalt supplies. “We cannot do the green transition without ASM operators,” Dia said. But these miners face a slew of challenges: They are often limited by a lack of market opportunities, a lack of expertise, and discriminatory gender norms.

In the larger field of industrial-scale mining, progress is reflected in a growing spotlight on standards and certifications. For instance, the Initiative for Responsible Mining Assurance (IRMA), which started 15 years ago with an initial focus on jewelry, is now a leading example of a third-party certifier with participating companies of all sizes located around the world.

“We have companies like Anglo American saying they will be audited at all their mine sites,” said Boulanger, “and smaller companies, [like] Carrizal in Mexico or Albemarle, who are still willing to do this, even though they’re starting companies.”

Certifications can help ensure that environmental, social, and governance concerns have been addressed by companies big and small. Public-facing audits should be emphasized in certification processes, noted Boulanger, because they enable communities to weigh in on the impacts of mining activities. “We need to be sure we ask communities whether the suppliers to our end brands are doing less harm,” she said. Certification programs also need to tackle mining risks in a holistic way, making sure not to inadvertently trade one risk for another.

IRMA is a crucial tool for developing higher mining standards and ensuring transparency, but legislation is ultimately needed to secure broad and lasting changes in the mining sector. “A voluntary initiative like IRMA is never going to replace the rule of law and government,” said Boulanger. “We need to improve these laws, and a global standard like IRMA can be used as a template and a support to governments as they increase and improve the strength of their laws and the robustness of their legal structure.”

Expanding Policy and Partnerships

In the U.S., the recent Inflation Reduction Act (IRA) represents a $370 billion investment in clean energy and tech, said Helaina Matza, Director of the Office of Energy Transformation at the State Department.

One key aim of the IRA is to onshore part of the energy supply chain, including critical minerals. Christopher Smith, Chief Government Affairs Officer at Ford, observed that “as we move to electrification and manufacture batteries to reduce greenhouse gas emissions and power our economy, the United States government feels like it should have a greater direct role in overseeing and managing environmental issues that are associated with the extraction and the processing of said minerals. The idea is to move those minerals back to the US or to countries with which the US has a free trade agreement.”

Apart from the IRA, Matza said that the US government has been working on critical minerals issues through two State Department initiatives that seek to build cooperation across countries: The Energy Resource Governance Initiative (ERGI) and the Minerals Security Partnership. “There are important resources everywhere, and the only way to make a global energy transition is if we cooperate,” said Burke.

ERGI supports capacity development for ESG in mineral producing countries around the world, explained Matza. Since it began in 2018, ERGI has brought over $30 million to countries like Argentina, Uganda, and most recently the DRC. The State Department has also developed an ERGI toolkit, which features targeted learning modules for mining sector professionals on everything from production and stewardship to working with Indigenous communities.

Matza added that this past June, the State Department also created the Minerals Security Partnership with the participation of ten other governments to “start diversifying clean energy supply chains.” The Partnership is using existing ESG criteria like IRMA to have clear conversations with countries and companies about what it means to uphold robust standards, and it is already providing insights into the thinking and priorities of producing countries across the globe.

“Many of the countries we spoke with… want to make sure that they have a true understanding of their resource base,” said Matza, “so that as they tender out projects or start making modifications to their royalty or tax regimes, they understand that they’re doing so in a way that totally serves their community.” She also noted that these countries want to see their own leaders and experts involved in these projects and want to develop value added industries within the green energy economy.

As we look towards a renewable energy future, legislation at home must do “a lot more than just securing supply chains,” said Matza. It must secure supply chains “in a way that really supports the economic development and growth of all economies involved.”

Transparency and Better Technology as a Competitive Advantage

“End brand” companies like the leading automaker Ford also need to shore up resilient and reliable supplies in an ethical manner. “Electrification is going be the key to future transportation,” said Smith. “And right at the middle of that is the ability to access and mine and refine these minerals that you need for these batteries in a way that’s consistent with our larger values.”

Despite the complex supply chain of Ford’s products, Smith said Ford is keen on responsible sourcing. “There’s a great deal of visibility on a brand like Ford, and it’s an important part of our competitive advantage to do these things well.”

New types of extraction technologies, including a recently-developed method of extracting lithium that is less water-intensive, offer another path to “better” mining. Investments in innovation could lead to technologies that reduce the mining sector’s environmental impact and minimize its risks—if these new methods are pursued alongside community participation, international standards, corporate initiatives, and cooperation across governments.

Even with all of these avenues operating in tandem, however, “the mining sector is never going to be perfect,” Thompson admitted. “It’s a difficult industry. But we really can and we must do better. We must learn from our mistakes. We must draw lessons from the resource curses of the past. We must learn to empower and listen to local communities. We must learn to manage environmental and social risks and insulate the sector from corruption. In short, we need to learn to govern the sector better.”

Sources: Diálogo Chino, Energy Resource Governance Initiative Toolkit, Initiative for Responsible Mining Assurance, Pact, U.S. Department of Energy, U.S. Department of State. 

Photo Credit: Panel of speakers at the event, courtesy of the Environmental Change and Security Program/Wilson Center.


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