Why transparency matters for critical mineral supply chains

The demand for transition minerals, also known as critical minerals, is surging as the world transitions to cleaner energy sources. This growth presents unique challenges and opportunities for governments, companies and communities.  

At a recent Transparency Matters event, representatives from government, industry and multilateral organisations shared diverse strategies and approaches on developing responsible supply chains. The session explored how governments and companies are ensuring that the benefits of increased minerals production reach local communities and align with global sustainability goals. 

Commitment to transparency in Argentina 

Luis Lucero, Secretary of Mining of Argentina, highlighted the country’s significant role in the global transition minerals market, particularly in lithium production. Argentina’s exports of critical minerals have grown substantially, from 18,000 tonnes in 2010 to nearly 45,000 tonnes in 2023. Recognising the immense potential and responsibility, Argentina has taken robust measures to ensure transparency and accountability in its mining sector. 

In 2019, Argentina joined the EITI and has since published three comprehensive reports detailing taxes, royalties and other payments. The country launched the SIACAM (Sistema de Información Abierta a la Comunidad sobre la Actividad Minera en Argentina), an open mining information system that includes a lithium dashboard, providing data on lithium projects, production, supply and demand. At the provincial level, authorities established roundtables on copper and lithium to facilitate transparency and stakeholder engagement. In 2023, the government created an online national supply register, listing over 1,500 suppliers from 22 provinces to enhance the visibility and competitiveness of national suppliers. 

Glencore’s drive for responsible sourcing 

Ilse Schoeters, Co-head of Responsible Sourcing on Metals & Minerals at Glencore, shared insights into the company’s responsible sourcing initiatives. Glencore’s programme includes policies and codes of conduct that mandate responsible business practices from their suppliers. They conduct supply chain due diligence based on OECD guidelines, employing a risk-based approach that intensifies scrutiny for high-risk areas. Noting the inherent corruption risks when dealing with intermediaries and suppliers, Glencore requires these parties to disclose beneficial ownership information. 

Furthermore, Glencore engages in on-the-ground assessments involving internal and third-party experts to address concerns raised by workers and communities. The company also invests in capacity building for suppliers, helping them develop responsible policies and offering training. Schoeters emphasised the importance of stakeholder engagement and the availability of grievance mechanisms for raising issues related to the supply chain. 

UNEP’s advocacy for sustainable development 

Elisa Tronda, Chief of Branch, Industry and Economy Division at the United Nations Environment Programme (UNEP), discussed the environmental implications of the energy transition. The growing demand for minerals often impacts water-stressed and protected areas, as well as indigenous communities. Mineral-rich countries must therefore tread a fine line between responding to the demands of energy transition and ensuring that the environmental and social aspects of mining are managed responsibly. 

To support this process, UNEP is helping countries in building capacity to manage mineral resources responsibly and sustainably, collaborating with organisations like the EITI and the Global Battery Alliance. UNEP’s efforts include helping countries navigate the complex landscape of over 80 existing standards and references, ensuring that they can trust and use reliable information. 

The Global Battery Alliance’s innovations 

Inga Petersen, Executive Director of the Global Battery Alliance, highlighted the critical role of the battery industry in the energy transition. The industry is expected to grow 17-fold by 2030, increasing the pressure on mining activities for essential materials like cobalt and lithium. The alliance was established in 2017 to address the significant impact of this growth on mining countries and to promote multi-stakeholder action. 

The Global Battery Alliance recently introduced the battery passport, a digital tool providing traceability and sustainability information for batteries. This initiative aims to integrate consistent information on the sustainability performance of battery materials, scoring them at the product level. By collaborating with a broad range of stakeholders, the Global Battery Alliance seeks to ensure that the rapid expansion of the battery industry does not come at the expense of communities and the environment. 

A collective effort for a sustainable future 

The Transparency Matters event underscored the urgent need for transparency in the development of responsible supply chains for critical minerals. It highlighted the imperative for governments, companies and international organisations to work together to ensure that the benefits of the energy transition are equitably distributed, and that environmental and social risks are mitigated. By sharing best practices and fostering collaboration, stakeholders can support sustainable development and help resource-rich countries navigate the complexities of the global transition minerals market.