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The Path Toward a More Just and Sustainable Mineral Supply Chain
What’s needed to make the Minerals Security Partnership work on the ground
Sep 15, 2024
Azure waters and exotic islands are not the only attractions of Cabo Delgado in Mozambique. The province is home to the largest graphite reserve globally, prompting Syrah Resources’ Twigg to open the Balama mine. This is one of the dozen projects across the world chosen by the Minerals Security Partnership to secure and diversify the supply of raw materials.
The energy transition is dependent on critical minerals such as lithium and copper as the world electrifies transport and shifts to renewables. With most minerals currently controlled by China, many western countries are playing catch up. The Minerals Security Partnership (MSP), whose members include Australia, Canada, India, the U.S. and many European countries, is central to this effort.
History is full of not-so-pretty attempts by western nations to capture minerals supply chains, as many living in the Global South know first hand. So how can this partnership offer a truly different value proposition centered on sustainability and deliver truly responsible projects?
Strong transparent standards
Despite some effort, the current situation in the extractive industries is far from adequate. A recent report by the International Energy Agency notes that while governance in the minerals sector has somewhat improved, progress on water and greenhouse gas emissions is at best stagnating. (Add to this a deeply felt mistrust among communities and companies and you quickly realize how complicated the matters are.)
But it does not have to be this way. Most technologies for safer tailings management or better water treatment, rules for robust anti-corruption and human rights due diligence, and practices to engage communities and co-govern with Indigenous peoples all exist. They just need to be applied and upheld consistently. This is where the new minerals partnership can bring real value.
Yet right now the MSP principles lack any such concrete requirements. That’s a big omission. For example in the case of Cabo Delgado, concerns around involuntary resettlement of nearby communities and local value proposition abide. MSP-supported projects like this one will be judged as much by the volumes of critical minerals they supply as by their environmental and social stewardship.
The good news is that the MSP does not have to reinvent the wheel. The answer lies in applying the human right and environmental due diligence practices as stipulated in the Organization for Economic Co-operation and Development’s (OECD) guidelines. The EU has recently done exactly that in its new battery law. This will require tracing, addressing and mitigating all manner of social and environmental risks, alongside upholding global treaties such as on Free, Prior and Informed Consent.
Any global miner, refiner, or recycler whose cobalt, graphite, lithium, and nickel are found in batteries on the European market will already have to track and mitigate all manner of social and environmental risks from 2026, including forced labor, water pollution, and biodiversity. MSP member countries can simply uplift these provisions into the partnership projects.
From rhetoric to action on the ground
Setting strong and transparent standards is the first step. These need to also be implemented so that they bring difference on the ground.
This means that the minerals partnership needs to quickly move from vision to a pipeline of responsible projects on the ground. So the focus should be on coordinating with local governments to bring local value and infrastructure, on engaging local communities to have a social license to operate and on bringing in finance instructions to make the projects happen.
Given how far ahead China is, there is no time to waste. A laser sharp focus to scale responsibly managed projects across the world is necessary to build a more diverse supply chain. But this should also come with better environmental stewardship and advancing the rights and livelihoods of those impacted, breaking from past behavior.
The Minerals Security Partnership shows global governments are waking up to the challenge of securing critical minerals responsibly. But whether projects like the Balama mine will become largest suppliers of quality graphite and raise the local community out of poverty will depend on how quickly responsible mining practices are scaled up on the ground.
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A Full-Court Press for Renewables Will Save Money and the Planet
Although there are up front costs of building solar and wind farms, these new energy plants will pay for themselves over time, and by the 2040s energy will be much cheaper.
Jun 14, 2024
Last week, the International Energy Agency put out a new report that turns conventional wisdom regarding the clean energy transition on its head.
It is cheaper for everyone to adopt solar, wind, batteries, and other renewables as soon as possible than to go on depending on coal, fossil gas, and petroleum. And we’re just talking about energy costs in a vacuum here, not factoring in the climate change damage that fossil fuels do to the planet, which costs billions of dollars a year and will cost ever more as time goes on.
The report’s authors write that in China in 2023, “more than 95% of new utility-scale solar photovoltaic (PV) installations and new onshore wind capacity had lower generation costs than new coal and natural gas plants. Where electric cars and two- and three-wheelers have higher upfront costs, which is not always the case, they typically result in substantial savings because of lower operating expenses.”
Since the cost of producing electricity by solar is falling so fast, whereas petroleum prices are either stable or slated to rise, if we shift from oil to electricity we obviously are saving a lot of money.
I repeat, solar and wind had lower generation costs. And no wonder, since the cost of solar panels plummeted an astonishing 30% in 2023. And we’re only at the beginning of the transition. Between 2009 and 2019, the price of solar electricity dropped 89%. Think about the last 10 years of gasoline prices in the U.S. The average price of gasoline in 2014 was about $3 per gallon. In 2023 it was $3.52. In real terms, accounting for inflation, the price was probably about flat or down just a wee bit. Fossil fuels are remaining just as expensive as they always were, but renewables are rapidly declining in price. These declines will continue as new technologies are invented and implemented.
Although there are up front costs of building solar and wind farms, these new energy plants will pay for themselves over time, and by the 2040s energy will be much cheaper. The IEA says, “Today, around 50% of total consumer energy expenditure is on oil products, and another 35% is on electricity. In rapid energy transitions these swap places, making the price of electricity the key measure of affordability for most consumers.”
Since the cost of producing electricity by solar is falling so fast, whereas petroleum prices are either stable or slated to rise, if we shift from oil to electricity we obviously are saving a lot of money.
But, we’re going to need some major investments up front to unlock these lower prices. The report says: “As things stand, around $3 trillion is invested each year into the energy sector, of which $1.9 trillion is in a range of clean energy technologies and infrastructure. By 2035, total investments need to rise to $5.3 trillion in the NZE Scenario, with $5 trillion going to clean energy.”
The bottom line is the bill you get from your energy utility every month, and your monthly cost for transpiration fuel. The IEA observes, “Our projections highlight that rapid clean energy transitions result in lower consumer bills compared with a trajectory based on today’s policy settings.”
If we stop subsidizing fossil fuels and put the money instead into a Manhattan Project-style full-court press for renewables, in 11 years consumers could be paying 20% less for their energy, especially in the developing world.
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Climate Groups Call for Rich to Pay More as International Meetings Begin
"We have to put the social justice element upfront," an architect of the 2015 Paris agreement said as the world's climate delegates gathered in Germany.
Jun 04, 2024
Advocates on Tuesday issued strong calls to action on climate finance for developing countries and an international agency released a report on the need to ramp up renewable energy production as the Bonn Climate Change Conference continued in Germany and G7 nations prepared to meet in Italy next week.
At the conference in Bonn, Friends of the Earth International pushed for more rich-country financing to pay for the rising costs of climate impacts in the Global South, while Laurence Tubiana, head of the European Climate Foundation and an architect of the 2015 Paris agreement, called for the global rich to pay their share through taxes and consumption levies.
Meanwhile, two organizations warned that countries aren't on track to meet targets they set just last year. Oil Change International (OCI) published a briefing showing that G7 nations are expanding oil and gas commitments that undermine goals set at the United Nations Climate Change Conference (COP28) meeting in Dubai, and the International Energy Agency (IEA) issued a report showing that the world's nations are not on track to meet their Dubai pledge to triple renewable energy production by 2030.
"The world is on fire because of decades of inaction by rich countries on reducing emissions, and their failure to pay the climate finance they owe to developing countries to transition to renewable energy systems for all, and to pay for rising costs for loss and damage and adaptation," Sara Shaw, Friends of the Earth International program coordinator, said in a statement. "What is on the table to date is scales of magnitude away from what it needed. This year must be a year of breakthrough on climate finance."
Climate representatives are meeting in Bonn this week and next to prepare for COP29 in November in Azerbaijan, where a key agenda item is expected to be financing for a green transition in the Global South. COP negotiations are conducted under the aegis of the United Nations Framework Convention on Climate Change (UNFCCC). At COP21 in 2015, nations signed the Paris agreement, a treaty that sought to limit global warming to less than 2°C above preindustrial levels.
Tubiana, an architect of that deal, said Tuesday that tackling climate change requires centering global justice in order to avoid conflict and gain public acceptance of climate measures.
"We have to put the social justice element upfront," Tubiana, a French economist and diplomat, toldThe Guardian.
Tubiana said that raising the funds required for low-income nations will require holding both rich nations and people to account, via taxes and consumption levies, given that inequities exist not just between nations but also within them.
"This inequality is true not only between developed countries and developing ones, but within each country—the 1% of rich Chinese, or the 1% of very rich Indians, or the U.S. citizen—they have a lifestyle which is very, very similar, in terms of overconsumption," she said.
The world's richest and most powerful nations are not taking responsibility for climate action as they should, the new OCI briefing argues.
"Some G7 countries are massively expanding fossil fuel production at home, while others are investing in more fossil fuel infrastructure abroad," the briefing states. "Both are catastrophic failures of leadership."
OCI cites the United States, Italy, and Japan as particularly bad climate actors. The U.S. is the largest oil and gas producer in the world and has plans for massive expansions of the industry, despite President Joe Biden's climate promises, the briefing notes. Italy has announced plans to double natural gas production. And both the U.S. and Japan have financed billions of dollars worth of oil and gas production in other countries just since the end of 2022, the document states, citing earlier OCI findings.
.@G7 countries 🇨🇦 🇺🇸 🇬🇧 could be responsible for nearly half of the CO2 pollution from new oil & gas projects planned between 2023 and 2050 - equivalent to the lifetime emissions of nearly 600 coal plants.
📑 https://t.co/ujhMLMVNtr pic.twitter.com/8IB1sxLuHj
— Oil Change International (@PriceofOil) June 4, 2024
The IEA also spelled out unfulfilled commitments, while detailing progress that has been made on the energy transition. The agency looked at the domestic policies and targets of 150 countries to see how far along they were toward reaching the international target of tripling renewable power generation by 2030. It found that once added together, the nations' domestic plans would get them about 70% of the way toward the 11,000 gigawatts of additional capacity required to meet the goal.
"There is a gap, but the gap is bridgeable," Heymi Bahar, a senior energy analyst at the IEA and co-author of the report, toldThe Guardian.
Governments have not in most cases written these domestic plans into their Nationally Determined Contributions (NDCs) under the Paris agreement. The IEA report says that countries need to "bring their NDCs in line with their current domestic ambitions" and scale those ambitions up further still, to get from 70% to 100%. Moreover, they must follow through with their promises and achieve the targets they've set.
"This report makes clear that the tripling target is ambitious but achievable—though only if governments quickly turn promises into plans of action," Fatih Birol, the IEA's executive director, said in a statement.
The world added about 560 gigawatts of renewable capacity in 2023, a record increase, more than half of which came from China, according to the IEA. About half of planned capacity increases are in solar, with a quarter from wind power, the IEA report states.
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