The energy transition has been defined by politicians as the only way forward for human civilization. Not every country on the planet agrees with this, but those that do have the loudest voices. And even amid the fossil fuel crisis that is beginning to cripple economies, transition remains a goal. It’s no secret that the transition – on the scale envisioned by its architects and staunchest proponents – would require massive amounts of metals and minerals. What is not talked about so much is that most of these metals and minerals are already rare. And that’s just the beginning of the transition problems.
Mining industry executives have warned that there is not enough copper, lithium, cobalt or nickel for all the electric vehicle batteries needed for the transition. And they weren’t the only ones either. Even so, the European Union this month went ahead and effectively banned the sale of internal combustion engine cars from 2035.
“Rare earth materials are fundamental building blocks and their applications are very wide in modern life,” said a senior vice president of MP Minerals, a rare earth miner, Told fortune this month. He added that “a third of the demand in 2035 is not expected to be met based on current investments”.
Due to the shortage of supply, prices are on the rise, as are prices in all commodity sectors. According to a calculation by Barron’s, the price of a basket of electric vehicle battery metals that the service tracks has jumped 50% in the past year due to a variety of factors, including Western sanctions on Russia, which is a major supplier of these metals in Europe.
The combination of supply shortages and rising prices, of course, makes the energy transition even more expensive than expected. It also reminded us all that because of these metals and minerals, which are exactly as finite as crude oil and natural gas, the transition is not to a renewable energy future. It’s towards a low-carbon future. And that future could perpetuate some of the worst patterns of the past that we so wish to leave behind.
Much of the battery metals needed for the energy transition come from Africa, a continent marked by poverty, corruption and political uncertainty. It is also a continent currently threatened by a new form of colonialism due to the energy transition.
In a recent analysis for foreign policy, Cobus van Staden, a China-Africa researcher at the South African Institute of International Affairs, has written that the dirty secret of the Green Revolution is its insatiable thirst for resources from Africa and elsewhere that are produced using some of the dirtiest resources in the world. technologies.
More importantly, van Staden added: “What’s more, the accelerated shift to batteries now threatens to replicate one of the most destructive dynamics in global economic history: the systematic extraction of raw materials from the global south of a way that has made developed countries incredibly wealthy. while leaving a trail of environmental degradation, human rights abuses and semi-permanent underdevelopment across the developing world.
It’s hard to argue with this prediction if you know the history of resource exploitation in Africa. Sometimes called “the resource curse” and commonly used for oil, it was in fact a notable feature of the colonial and postcolonial period. Van Staden notes human rights abuses, corruption, and the perpetuation of low labor and environmental standards, and he also notes that nearly all foreign companies in Africa’s mining sector do all of these.
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Based on this evidence, it appears that beyond the non-renewable, the energy transition appears not very socially conscious. In other words, the ESG investment movement, which focuses on companies in transition, could actually be a movement that rewards companies that are not very environmentally and socially friendly. At least not in Africa. And there are no white hats because, as Van Staden puts it, “the whole logic of the race for battery metals is to ensure national prosperity at home, not in Africa.”
It could perhaps be argued that unlike last time, the industrial revolution, this time around we have a lot more mechanisms to protect human rights. As true as that may be, there has not been much progress in this regard in the Democratic Republic of Congo, for example, a huge country that is essential for the transition because of its cobalt wealth.
Even with these mechanisms, there is no way to eliminate corruption unless all parties involved want to eliminate it, which does not seem to be the case with mining companies and resource-rich African governments. That’s the problem with corruption; it is difficult to uproot. Corruption, in turn, affects environmental standards and fair compensation for workers, and the resource curse maintains its grip on the continent.
The good news is that all of these transition issues were more or less taboo until recently. Now it is being talked about more and more, and this would hopefully lead to a readjustment of the goals or at least the timelines to make them more realistic. Maybe, just maybe, the idea of a just transition will also pick up speed.
By Irina Slav for Oilprice.com
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