This study, commissioned by the EITI, provides an overview of global value chains of selected transition minerals and highlights the relationship between global energy transition objectives and the need for stronger minerals sector governance. It demonstrates that EITI implementing countries account for a substantial share of transition minerals mining.
The report identifies four risk areas in the value chains of transition minerals and provides recommendations on how to mitigate risks through policy actions, advocacy, analysis and partnerships.
Low-carbon power generation and electrification are having a profound impact on the demand for transition minerals. As the global energy transition accelerates, low-carbon energy technologies will experience rapidly growing markets, driving growth in the demand for a range of minerals.
Global mineral value chains are geographically dispersed and fragmented, with multiple countries and companies specialising in different steps. A substantial part of the growing demand for transition minerals will likely be satisfied by EITI implementing countries, many of which hold large shares of identified mineral reserves and resources. Some EITI countries are already major exporters of transition minerals, and many may see these trade flows increase in the coming decades.
Increased demand for transition minerals is bringing about risks for diverse stakeholders which, if not addressed, could hinder the sector’s contribution to sustainable development and inhibit the fight against climate change. Spanning across global, transnational, national and subnational levels of mineral governance, these risks are manifold, ranging from environmental impacts and corrupt deals to price shocks and disruptions in global supply chains.
Yet there are numerous opportunities to address these risks. In resource-rich countries, there is an opportunity to improve governance frameworks and transparency to attract investment in the extraction and beneficiation of transition minerals. This can in turn promote local procurement, employment and livelihoods linked to mining, social investment and community-led development. There is also an opportunity for industry to collaborate in the development of value chains from mining to the manufacturing and deployment of energy transition technologies.
For governments and consumers in countries importing transition minerals, there is an opportunity for more responsible and reliable sourcing through regulation and open data initiatives. There is also an opportunity for companies in transition mineral value chains to use voluntary standards to certify their environmental, social and governance (ESG) performance and meet their supplier due diligence requirements. At the global level, there is an opportunity for greater international and regional cooperation to ensure that transition minerals contribute to a just energy transition.
This study, undertaken by The University of Queensland, was commissioned by the EITI and funded by the USAID programme.