Global demand for critical minerals raises concern for developing nations

Panama government's media tour to Cobre Panama mine, in Donoso

A view of Cobre Panama mine of Canadian First Quantum Minerals, one of the world's largest open-pit copper mines, which was forced to shut down after Panama's top court ruled that its contract was unconstitutional following nationwide protests opposed to its continued operation, during a media tour, in Donoso, Panama, January 11, 2024. REUTERS/Tarina Rodriguez

Source: X08026

There is a growing demand for minerals required for renewable energy technologies such as electric vehicles (EVs), solar panels and wind turbines, amid the urgency to address the climate crisis.

United Nations Trade and Development (UNCTAD) projects a substantial increase in demand for minerals like lithium, nickel, cobalt, and copper by 2050 using data from the International Energy Agency (IEA).

For developing nations most dependent on revenue from these raw materials, the report shows more complex economic issues.

According to UNCTAD, this reliance on commodities inhibits economic growth and perpetuates inequalities across regions like sub-Saharan Africa, South America, the Pacific, and the Middle East.

Currently, 95 developing countries, nearly half of the UN's membership, are affected by commodity dependence. Notably, 29 out of 32 nations classified as having low human development in 2021 were commodity-dependent.

“Commodities and commodity dependence are issues at the heart of the past and especially the future of trade and development,” said UN Trade and Development Secretary-General Rebeca Grynspan.

Africa, in particular, holds a significant stake in the mining of metals essential for renewable energy transition. UNCTAD highlights that over a fifth of such metals crucial for renewable energy are mined in Africa. For instance, the demand for cobalt, a vital mineral for EVs predominantly found in the Democratic Republic of Congo (DRC), could skyrocket by nearly 1,500% by 2050.

However, despite being primary producers and exporters of these minerals, many African countries have yet to capitalize fully on their resources. UNCTAD notes a shift in some nations towards value addition through local processing. In the DRC, for instance, significant progress has been made in cobalt refining and processing, resulting in a substantial increase in processed cobalt exports compared to raw cobalt.

The UN Trade and Development has identified 110 new mining projects worldwide, valued at $39 billion, with a substantial portion invested in developing countries. However, to achieve the ambitious 2030 net-zero emission targets, the industry may require substantial investment in new mining projects, according to the report. Estimates suggest a need for around 80 new copper mines, 70 new lithium and nickel mines each, and 30 new cobalt mines.

Etornam Kornu