Recent geopolitical events have had profound implications for energy markets, highlighting the urgent need to find new pathways to improve energysecurity, broaden energy access and accelerate the transition to renewableenergy sources.
Mineral resources are essential components of the energy transition, and demandfor transition minerals such as lithium, graphite, cobalt and nickel is already increasing.Commodity markets, however, are rarely predictable, and producers and consumersof transition minerals alike will be faced with uncertain and volatile market conditionsas renewable energy technologies evolve. The boom-and-bust nature of demandcreates an imperative for strengthening governance of mineral value chains, to ensurethat the means of production are consistent with the ends to which minerals are usedfor the benefit of people and the planet.
The research in this report has identified governance risks at a subnational, national,transnational and global level which are exacerbated by current trends in the demandfor critical minerals. Many of these risks, such as potential shortcuts in consultationprocesses, encroachment into conservation areas and the depletion of waterresources, will be hardest felt by the most vulnerable communities in regions richin these minerals. At a national level, price volatility may lead to unpredictablerevenue flows, posing challenges to sound economic planning. Strong exportdemand may reduce incentives for value addition and beneficiation. In transnationalsupply chains, there are risks of increased smuggling or illicit mineral flows andcorruption, where governance risks ultimately disrupt supply of the minerals neededfor low-carbon energy technologies. Yet, balancing these risks are opportunities– to attract investment, increase local procurement, improve employment andlivelihoods, and address the needs of local communities.
Language: English
Publisher: Extractive Industries Transparency Initiative (EITI)
Region: Australia
Type: Report
CITATION
Sturman, Kathryn , Loginova, Julia , Worden, Sandy , Matanzima, Joshua , and Arratia-Solar, Andrea (2022). Mission critical: strengthening governance of mineral value chains for the energy transition. Oslo, Norway: Extractive Industries Transparency Initiative (EITI).