Critical minerals are the key to 21st-century tech. Here’s the ‘trilemma’ that defines how to mine them

Take, for example, electricity production. Fossil fuels remain a cheap source of energy, yet the carbon emissions they produce have negative implications for sustainability. They also pose security challenges when there is a dependency on belligerent suppliers. The conflict in Ukraine has forced many European countries to reckon with the strategic implications of their dependence on Russian hydrocarbons.

Transitioning to renewable energy offers a solution to issues of both security and sustainability for European countries; however, the associated cost in the short term is likely to remain high. The supply chains of the critical minerals required to drive the transition to green energy are complex and less mature than those of fossil fuels. Moreover, there is great uncertainty regarding the quantities of critical minerals needed for net-zero carbon targets. Recent estimates from the International Energy Agency based on national climate goals suggest that demand for critical minerals will quadruple by 2040.

Additionally, the environmental cost of critical mineral extraction brings into question the viability of such a transition. Vlado Vivoda from the Rabdan Academy education institute points out: “There are simply not enough [critical minerals] out there if we are going to produce at leading environmental and social standards.”

To complicate matters further, countries are competing for access to critical minerals. Over the past three years, hundreds of national policies addressing the resilience and production of critical minerals have been enacted. However, many of these policies are not multilateral in scope and could encourage geopolitical fragmentation.

With the increased strategic competition between large powers such as the US and China, along with strategies such as “decoupling”, “de-risking”, “friendshoring” and “onshoring”, there is a risk that the race to secure critical minerals could lead to a tragedy of the commons wherein competing political blocs exploit scarce resources and overlook the environmental costs.

Such a scenario must be avoided. Instead, international cooperation needs to be prioritized to ensure long-term availability of critical minerals. As Stephen Scalet from Trends Research & Advisory emphasizes, the two forces that will allow for this are a global convener on critical minerals and greater knowledge production from thinktanks, universities and industry. Collaborating to identify critical minerals and their supply chains is a crucial first step in engaging in meaningful international collaboration.

Any truly international strategy addressing critical minerals must place the interests of developing countries at its core. This is essential partly because a significant portion of critical minerals is found in developing economies (such as sub-Saharan Africa, which holds 30% of the world’s mineral reserves, with the Democratic Republic of the Congo alone accounting for 70% of cobalt supplies). Also, the interests of these countries risk being overshadowed by the geostrategic and economic priorities of the developed world.

This raises important questions about how “critical” these minerals are. Consider that over 80% of lithium projects and more than half of nickel and copper projects are found within indigenous peoples’ lands. The extraction of these resources could lead to displacement of local populations and destruction of natural ecosystems. According to Professor Sophia Kalantzakos, some producing countries face a huge dilemma: “Is their water more important than producing lithium for world markets? To make this a just transition, the developing world cannot become an enormous extraction site serving the interests of industrial nations. This is why implementing ESG standards is crucial, and protecting fragile ecosystems and the livelihoods of those living there is essential.”