Dangerous Scramble for Renewable Energy Resources Jomo Kwame Sundaram

The growing and changing material requirements for new technologies have triggered natural resource scrambles for strategic minerals, generating dangerous rivalries fought out in the global South.

Scrambles for resources

Jayati Ghosh, Shouvik Chakraborty and Debamanyu Das have analyzed these new scrambles for mineral resources in developing countries triggered by major new innovations since the electronics boom.

Natural resources here refer to naturally occurring solid, liquid or gaseous materials in or on the Earth’s crust. When extracted and exported commercially, they are considered primary commodities.

All technologies – both peaceful and military – have specific material requirements. For example, energy transitions need particular minerals for renewable energy generation, transmission and storage.

New technologies, with specific material requirements, are changing the nature of rivalries – among states, corporations and individuals – seeking to control these mineral resources.

Feasible mass use of renewable energy requires extracting needed natural resources, which incurs costs and has adverse consequences. Commercial feasibility implies profitable extraction of desired minerals.

Thus, addressing global warming by generating more energy from renewable sources – while desirable and necessary – in turn generates new problems and challenges which need to be addressed.

Rare earths

Despite their name, rare earth elements (REE) may not actually be scarce. But most REE are difficult and costly to extract as they are usually found together with other minerals. Unsurprisingly, REE demand and supplies have changed greatly in recent years.

For the time being, demand for at least 17 ‘rare earth’ minerals is expected to grow. The inter-governmental International Energy Agency (IEA) projects supplies of some critical minerals will increase at least 30-fold over the next two decades.

Extracting lithium and other such minerals also has very problematic environmental implications. Mined all over the world, REE are usually processed and separated by several stages of often complex and costly extraction and chemical processing, with many harmful to the environment.

China currently leads the world in rare earth production, with over a third of the world’s known REE reserves. While Chinese companies dominate some supplies, China’s rare earth imports currently exceed its exports.

Nevertheless, China dominates ‘downstream’ processing of REEs. Chinese companies control over 85 per cent of the costly REE processing processes. Unsurprisingly, China also accounts for over 70% of the world’s photovoltaic solar panel production and over 90% of its silicon wafer manufacturing.

Lithium

Lithium is one of the minerals over which control has been hotly contested. Lithium is particularly needed for processes to replace mechanical energy generation using fossil fuels. It is also needed for many industrial, office and household appliances, including rechargeable batteries, electric vehicles and electronic goods.

Batteries – including rechargeable lithium-ion electrical grid storage devices – account for three-quarters of current supply. The IEA’s Sustainable Development Scenario expects demand to rise 42-fold in less than two decades!

In 2021, there were almost 89 million tons of known lithium resources, mainly in developing countries. For decades, lithium mining has been very controversial, largely due to increasingly better known adverse environmental impacts.

As pure lithium is very chemically reactive, it is often mined as ore, as in West Australia. It is also obtained from salt flats and brine pools in the southern cone of South America, particularly in Bolivia, Chile and Argentina.

For decades, China has led the world in lithium mining. Australia and the US were second and third by the start of the pandemic, with 12% and 9% respectively. While Australia is the world’s largest exporter, lithium is mainly and increasingly mined in developing countries by a relatively few companies.

Undermining communities

REE mining has adversely impacted various ecosystems and communities. Mineral deposits may have to be raised from subterranean sources, or ‘concentrated’ by evaporation.

Such techniques typically deplete, contaminate and otherwise reduce access to fresh water. Local water systems – used by people, animals, including livestock, and plants, including crops – are often badly compromised as a consequence.

Extractive mining and related operations have worsened such environments. But mining companies can often get their way with impunity, often intimidating communities with the help of local politicians, government officials and police.

Such ecological damage has devastated forest and vegetation cover, caused biodiversity loss, and compromised hydrological systems. Thus, extractive operations often involve abuses, with adverse effects for local communities.

Economic gains to local communities are typically modest compared to mining’s adverse consequences. Benefits largely accrue to local ‘enablers’ while costs vary within communities with circumstances.

The authors also urge majority government ownership of mineral extracting and processing companies. This will reduce foreign reliance and meddling, including by big powers such as the United States and China.

Government transparency and accountability, including independent audits, can help ensure less adverse consequences and fairer compensation for all involved.

This also prevents elite capture, abuse and deployment of mineral rents in their own interest. Avoiding such abuses is necessary to ensure resource rents actually advance sustainable development, as Bolivia is striving to do.

Sustainability undermined?

New frontiers for mineral extraction are emerging, especially as innovation creates new extraction and processing possibilities. This implies a vicious circle as global warming becomes both cause and effect of such mineral extraction.

Mining practices threaten ecological fragility and vulnerability. Similarly, polar and seabed exploration and mining may well trigger disastrous environmental consequences, including mass extinctions of vulnerable polar and marine life.

(This article was originally published in Inter Press service (IPS) news on September 20, 2023)