The next global resource crisis
Only a small group of academics and policy wonks once expressed concern about the West's dependence on China for so-called vital minerals.
The next global resource crisis
Only a small group of academics and policy wonks once expressed concern about the West’s dependence on China for so-called vital minerals. The anxiety is currently a popular topic, making headlines and the focus of a BBC documentary series. The most crucial query, however, remains unanswered: What should we do about it?
The dangers that lie ahead cannot be denied. It is not wise to depend on a hostile state to deliver necessities, as Europe has discovered over the past few months. However, the solution to the current energy crisis, which is to quicken the switch to renewable energy sources, raises our reliance on minerals like cobalt, nickel, graphite, lithium, and copper and threatens to create a situation similar to the one we are currently in.
Such minerals are crucial to the switch to sustainable energy, as they are used in everything from electric batteries to wind turbines and extended electrical infrastructures. According to a World Bank assessment, in order to fulfill global climate targets by 2050, their production may need to expand by almost 500%.
China is the industry leader in the processing of several of these vital minerals, much as Russia is a significant producer of fossil fuels. About 60–70% of the lithium, nickel, and cobalt in the world are refined there. Additionally, it has made significant investments in some of the richest reserves of these minerals in the world, including nickel in Indonesia and cobalt in the Democratic Republic of the Congo, giving it increasing control over the mines from which these resources are extracted.
Governments in the West are currently working quickly to come up with plans for advancing the energy transition without becoming unduly reliant on China for essential minerals. The recently passed Inflation Reduction Act in the United States offers substantial incentives for electric car makers to get crucial minerals from reputable suppliers. The UK has unveiled a “critical minerals plan” that calls for increasing domestic capacity in the industry. Australia and the European Union are moving on with related measures.
All of these nations see expanded metal recycling as a component of the solution. However, they also understand that for the time being, it can only make so much of a difference. In order to quickly expand more mines and processing facilities for essential minerals, both at home and in “friendly” nations, is a key component of all of their initiatives.
These tactics, however, do not fully recognize a significant obstacle: the complex local politics surrounding the development of new mines and industrial facilities. In wealthy nations, acquiring approval to build large-scale new mines can take decades, if it comes at all, due to “not in my backyard” campaigning, opposition from indigenous and environmental groups, and complex planning procedures.
Mine development frequently encounters vehement local opposition in lower-income nations, which is exacerbated by a general mistrust of major Western-owned mining companies. Numerous proposed new mines for essential minerals have recently been delayed or blocked in both wealthy and developing nations, including the US, Serbia, Portugal, Peru, and the US.
Undoubtedly, this activism speaks well of the vitality of local democracy in nations that support the West. However, there is still a chance that the West will find itself once more at the whim of a hostile dictatorship if it is unable to obtain the raw resources that the energy transition requires from friendly nations at a fair price. Policy circles are now rife with worries that China could “weaponize” its supremacy over these minerals, much like Russia has done with natural gas.
If the issue is not resolved quickly, Western countries may find themselves forced to enact emergency measures that disregard local objections, such as opening up domestic mines and facilities as a matter of national security. Aside from ignoring local opinion, they would probably find themselves attempting to coerce developing nations into increasing their production. For at least a century, this has been the depressing trend in energy and resource geopolitics.
Making quick progress toward a new “grand bargain” between mine operators and local stakeholders will be necessary to prevent this scenario. In order to do this, a comprehensive campaign including all mineral-rich, Western-aligned nations that aims to mend fences between the two sides must be initiated immediately.
Mining corporations must make sure that new operations are more responsive to local needs and provide more local economic advantages, with the assistance of Western governments. The threats that mines can pose to the environment and public health also require the implementation of more reliable, obvious controls. Mining businesses must show that they outperform Chinese corporations in developing nations on these fronts. Western miners are already engaged in a variety of ethical environmental and social projects, but these must be prioritized strategically and scaled significantly.
Local regulators must streamline and speed up the permission process in return for these efforts, and activists and local communities must agree that well-designed projects must receive support. Green-minded activists will understand the significance of preventing a significant threat to the energy transition, but some people have established prejudices against giant corporations pursuing large-scale projects like mining. Governments can assist in this situation by intervening to settle conflicts between businesses and communities.
Some could contend that this is a painful solution to an issue that has not yet materialized. However, it is now all too clear what risks dependance on China for essential resource supply entails. The best course of action is to unlock faster mining development closer to home, but doing so will call for some completely novel ideas.
