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IEA Leads Summit on Secure, Responsible Critical Minerals Supply

The need for international cooperation in developing a sustainable critical minerals industry is becoming increasingly evident, as several forecasts suggest that demand will likely outpace supply over the next decade. As governments worldwide push for a green transition and rapid innovations are being seen in renewable energy and clean technology, the dependency on critical minerals is growing. However, there are wide concerns about the impact of massive mining expansion on the environment. Countries must now work together to determine the best approach for obtaining these minerals to support the green transition without undermining the environmental aims of the undertaking. 

Critical minerals, such as copper, nickel, cobalt and lithium have been a key component to the rollout of a wide range of technologies and renewable energy equipment in recent years. The International Energy Agency's (IEA) Critical Minerals Market Review 2023 shows that the energy transition minerals market doubled over the past five years to reach $320 billion in 2022. This trend is set to continue as more governments pursue a green transition. There has been increased investment in mining activities in response to this growth in demand, which is expected to lead to the increased production of several critical minerals over the coming years. However, there are concerns about possible project delays and technology-specific shortfalls.

In 2023, the IEA held the first-ever international summit on critical minerals and their role in clean energy transitions, aimed at establishing measures to promote the secure, sustainable and responsible supply of raw materials. The IEA emphasised the need for policy interventions to ensure sustainable mineral supplies and the proliferation of existing legislation, such as the European Union's Critical Raw Materials (CRM) Act, the U.S.'s Inflation Reduction Act, Australia's Critical Minerals Strategy and Canada's Critical Minerals Strategy.

However, to supply the world with the critical minerals required to advance a green transition (and to do so in a sustainable way) will require greater international cooperation in the coming years. Without international mechanisms and standards for mining, there is likely to be an insufficient supply of critical minerals to meet demand within the next decade. In addition, as just a few countries and regions contain the majority of certain critical minerals, mining activities must be diversified not to overexploit or become overly dependent on any one country, which has so often been seen in the past. To this end, the EU stipulates that no more than 65 percent of any key raw material should come from any single country. 

To enhance the international critical mineral market, it is important to first determine exactly which metals and minerals should be classed as 'critical'. It is also important for countries to begin viewing critical minerals as something vital to their future co-existence, rather than as something to compete over. Geopolitical factors will come into play, but a multilateral approach to the supply of critical minerals is vital for the achievement of a global green transition. 

As critical minerals are scattered across the world, no country or region can be entirely self-sufficient in accessing and processing all the raw materials required to support a green transition. In terms of international mining standards, a common framework could help to safeguard the socio-environmental bar in new extractive projects, particularly in developing country regions of high political risk. This would also help overcome export restrictions, which have previously limited access to certain critical minerals, such as in the case of nickel in Indonesia.

In the case of the U.S., the White House has developed several bilateral cooperation agreements with a focus on critical minerals alongside countries with close diplomatic and strategic relationships. The U.S. has strong energy ties with Canada, importing large amounts of critical minerals from its neighbour. Australia also supplies the U.S. with minerals and the two powers set up the U.S.-Australia Critical Minerals Working Group to manage trade relations. However, these types of relationships could be extended to include other world powers and enhance mineral extraction and trade. 

At the international level, at the beginning of 2024, the United Nations Industrial Development Organisation (UNIDO) announced the launch of the Global Alliance for Responsible and Green Minerals. The UNIDO's Director General, Gerd Müller, announced the launch of the Alliance at a ministerial roundtable held in Saudi Arabia. Müller stated, "Without critical minerals, there is no green energy transition, no green industrialisation". He emphasised that "a Global Alliance for Responsible and Green Minerals, with binding environmental and social standards for the mining industry and an independent certification system, has advantages for all market participants. It creates a real win-win situation for the countries with the raw materials. It will increase local value addition and production alongside jobs in the mining regions, and hundreds of millions of people, primarily in artisanal and small-scale mining, will benefit from living wages, adherence to fundamental human rights, as well as standards in the sector. Finally, it will help reduce and minimize damage to the environment." According to the UNIDO, the Alliance will work to set up international guidelines and benchmarks for sustainable critical minerals supply chains and help countries with the implementation of standards and policies, supported by a sound certification system. 

By Felicity Bradstock for Oilprice.com 

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Felicity Bradstock

Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK. More