The Fight Against Critical Mineral Mining
- Demand for lithium, cobalt, and other critical minerals surged in 2024, driven by green energy technologies.
- Mining expansion faces legal and social resistance, especially from Indigenous communities.
- Experts call for stronger global standards to balance climate goals with environmental and human rights protections.
To meet the rising demand for energy and the increase in global renewable energy capacity, there is a clear need to expand critical mineral mining activities. Mining for metals and minerals, such as cobalt, copper, and lithium, has increased significantly in recent years and is expected to keep rising in line with the growing global demand. Although this has been widely supported by governments aiming to accelerate a green transition, some environmentalists and community groups are not so enthusiastic about the mining activities, which they are concerned could lead to environmental degradation.
Demand for critical minerals increased significantly in 2024, with lithium demand rising by 30 percent, while the demand for nickel, cobalt, graphite, and rare earths rose by between 6 and 8 percent. Growth was largely driven by energy applications such as electric vehicles, battery storage, renewables, and grid networks, according to the International Energy Agency (IEA). For battery metals such as lithium, nickel, cobalt, and graphite, the energy sector accounted for 85 percent of total demand growth over the past two years. The IEA forecasts that demand for critical minerals will need to triple by 2030 and quadruple by 2040 if we are to achieve net-zero emissions.
The U.S. Department of Energy lists a total of 50 critical minerals, while the European Union’s list includes 34. The IEA sees lithium, nickel, cobalt, manganese, and graphite as the most widely used critical minerals, which are all used in battery production. Aluminium and copper are widely used in electricity networks, and rare earths are used for magnets in wind turbines and electric car motors.
However, expanding critical mineral mining is not so straightforward, as many metals and minerals are rare and are concentrated in specific areas of the world, particularly in China, with 95% of gallium coming from China, for example. Australia contributes around 50 percent of the global lithium output, followed by China at 18 percent. Indonesia provides around 40 percent of the world’s nickel, with Australia and Brazil also holding significant reserves.
Cobalt is mainly mined in the Democratic Republic of Congo (DRC), with Australia holding around 15 percent. When it comes to rare earth metals, China holds roughly 40 percent of the global total, followed by Vietnam and Brazil with around 20 percent each. Meanwhile, Copper can be sourced from 56 countries, with Chile and Peru contributing 28 percent and 10 percent of global production, respectively.
It is widely agreed that critical mineral mining needs to increase if we are to achieve a global green transition. However, governments and mining companies must often contend with environmentalists and community groups to develop new mining activities in mineral-rich areas of the world.
Elisa Morgera, the UN’s special rapporteur on climate change and human rights, said, “The need for critical minerals in terms of climate action is an assumption that we need to challenge.” During an online forum, she questioned, “How do we take into account over-consumption by the super-rich, which we know are contributing to climate change in ways that are incomparable to the vast majority of the world’s population?”
Morgera called for “a step back… to ensure that any decisions around critical minerals are taken with a full understanding of the potential impacts on the environment and on everyone’s human rights.” She said that independent assessments should be carried out and that urgently addressing climate change should not supersede the protection of the rights of Indigenous peoples on whose territories critical minerals are often extracted.
The number of legal challenges to mineral mining operations has grown in line with industry expansion. The Business and Human Rights Resource Centre’s (BHRRC) just transition litigation tracking tool, which tracks lawsuits against projects to build renewable energy plants or mine for minerals, has identified 95 challenges since 2008, with three-quarters of these filed in the last seven years. The group found that 71 percent of lawsuits in its dataset were linked to the mining of bauxite, cobalt, copper, lithium, manganese, nickel, zinc, and iron ore.
The group reported that nearly half the claims were filed by Indigenous people, with 49 percent of these lawsuits being linked to violations of Indigenous peoples’ rights. Elodie Aba, a senior legal researcher at BHRRC, said, “Lawsuits, which are often a last resort, have become a powerful tool for those left out of the decision-making process. These lawsuits are not a rejection of climate action; they are a demand for a just transition.”
The IEA identified almost 200 national policies and strategies surrounding critical minerals, suggesting that many countries are developing specific legislation for mineral mining activities. However, to ensure that mineral mining does not cause immeasurable damage to the environment or harm human rights, stronger international norms and regulations on mineral mining must be established. As we move away from fossil fuels to renewable alternatives to limit global warming, we should not switch to another environmentally harmful activity without considering and mitigating the repercussions.
By Felicity Bradstock for Oilprice.com
The Shadow Economy of Critical Mineral Exports
- Chinese traders are actively circumventing China’s ban on critical mineral exports to the U.S. by rerouting shipments through third countries such as Mexico and Thailand.
- Despite the ban, U.S. imports of antimony, gallium, and germanium are on track to equal or exceed pre-ban levels, often at higher prices, due to these re-routing methods and mislabeling of goods.
- The illicit trade continues due to significant profit incentives, even as Chinese authorities crack down on domestic lawbreakers and third-country traders face scrutiny.
China’s 2024 ban on exports of critical minerals antimony, gallium and germanium to the U.S. sent prices soaring nearly 50% in a matter of days. It was a retaliatory move following Washington's crackdown on the country’s chip sector. But there are always loopholes, and new reports now reveal how Chinese traders are circumventing the ban by re-routing U.S. shipments through third countries.
According to U.S. customs data, the U.S. imported 3,834 metric tons of antimony from Mexico and Thailand in the first four months following the ban, more than almost the previous three years combined.
In fact, Mexico and Thailand now rank amongst the three largest importers of antimony from China, a big jump considering neither was previously featured in the Top 10 list just two years ago, and each has only a single antimony smelter, analysts told the Times of India.
“Several US importers and industry experts confirm that shipments are proceeding under alternative labels and routing methods… mislabelled as other goods such as iron or art supplies before being sent through third countries,” FastBull reported."It's a pattern that we're seeing and that pattern is consistent," Ram Ben Tzion, CEO of Publican, told Reuters, adding that Chinese companies are "super creative in bypassing regulations.
Back in May, China's Commerce Ministry acknowledged that unscrupulous foreign traders have been “colluding with domestic lawbreakers" to evade the country’s export restrictions, adding that this is now a matter of national security. However, U.S. manufacturers are hardly complaining, with imports of the three banned minerals on track in the current year to equal or even exceed levels before the ban, albeit at higher prices.
Unlike their Chinese peers, American buyers of banned Chinese minerals are taking advantage of a nice loophole since U.S. law does not expressly prohibit their purchase. Still, they have to contend with skittish Chinese logistics firms. Levi Parker, CEO of Gallant Metals, told Reuters he has been buying 200 kg of gallium per month from China, but cannot increase that to his desired volume of 500 kgs per month because big shipments are likely to draw scrutiny from Chinese authorities.
Also in the cross-hairs are traders in the third countries.
Thailand-based Thai Unipet Industries, a subsidiary of Chinese antimony producer Youngsun Chemicals, has reported doing brisk trade with U.S. buyers since the ban took effect in December 2024. Unipet shipped 3,366 tons of antimony to Texas-based Youngsun & Essen in the five months since the ban, nearly 30 times the amount the company shipped in the entire year prior to the ban, according to Reuters.
Whereas offenders generally face fines or bans on future exports, Beijing can sometimes classify some cases as smuggling, which carries a five-year jail term. Still, the promise of big profits is likely to keep the trade going, with prices of the three critical minerals at record highs.
Earlier in the year, a call between U.S. President Donald Trump and Australian Prime Minister Anthony Albanese sparked the concern of Beijing, a key importer of Australian minerals as well as a leading supplier of critical minerals to the U.S. Australia is a vital source of natural resources for China, providing 60% of the country’s iron ore imports.
For decades, Australia has been the upstream mineral supplier, whereas China has dominated the refining and processing of minerals for the global market. China has consistently been the largest buyer of Australian raw minerals, with Chinese investors like Tianqi and Ganfeng providing long-term capital to support and expand mining capacity in Australia. Australia is a major supplier of minerals used to make batteries for electric vehicles, with China’s Tianqi Lithium holding a large stake in the lithium hydroxide plant in Kwinana, Perth. In this context, Australia depends on China, while Chinese processors also depend significantly on Australia.
On the other hand, the U.S. and the West have been struggling to lower their reliance on China for critical minerals. Beijing has been doing everything in its power to thwart attempts by Western governments at independence. Since 2006, Beijing has controlled its supply of rare earths through the quota system.
In 2023, China issued three batches of rare earth output quotas, the first time it issued three quotas in a single year since it started the quota system, according to Reuters. The total quota for 2023 clocked in at a record high of 255,000 tons, good for a scorching 21.4% Y/Y increase. Beijing has also significantly tightened rules guiding exports of several critical metals and minerals, including a ban on the export of technology to make rare earth magnets, escalating an earlier ban on export of technology to extract and separate critical materials. China's commerce ministry sought public opinion on a potential ban on export of technology to prepare neodymium-iron-boron magnets, samarium-cobalt magnets and cerium magnets ostensibly to protect national security and public interest.
By Alex Kimani for Oilprice.com
