A critical minerals framework for a fair and just transition

Critical minerals are high on the agenda of South Africa’s G20 presidency. A draft Critical Minerals Framework sets a plan for investing in exploration; beneficiation at source, that is, improving the raw materials for smelting; and responsible mining and mineral sourcing. By endorsing the Framework at November’s Johannesburg Summit, G20 members could diversify supply chains and secure minerals needed for the energy transition. This could help to level the global playing field for resource-rich countries of the Global South and for mining-led economies such as Australia and Canada.

Renewable energy and electric vehicle battery technologies need critical and strategic minerals to meet the greenhouse gas emissions targets set out in the Paris Agreement. The energy transition demands significant investment – by some estimates $44 trillion by 2030. These investments are needed in new technologies, projects, people and infrastructure. In addition, major investments will also be needed in mining, refining and smelting key commodities – to the tune of an additional $300–400 billion per year over the next five years.

A unique opportunity to reshape critical minerals governance

The G20 brings together the world’s major buyers and producers of critical minerals. China, the United States and the European Union are driving geo
political competition for critical minerals. Japan, Korea and India also source critical minerals for their industries through bilateral trade agreements. Conflict can disrupt supply chains for minerals concentrated in only a few countries, such as the Democratic Republic of Congo, Ukraine and Russia.

Mineral-rich countries struggle to drive their own development interests when up against great power rivalries to access their critical minerals. In the current global context, the G20 must reassert the importance of free trade, transparency and fairness in all sectors, including for minerals security. Despite US president Donald Trump’s absence at Johannesburg, the broad and diverse group of leaders meeting there have many opportunities for critical minerals partnership.

The G20 provides a forum for greater multilateral cooperation between the big industrial ‘buyers’ and smaller mining economies that produce lithium, copper, nickel, graphite, rare earths, and other critical and strategic minerals. Many are G20 countries of the Global South, such as Argentina, Brazil, Indonesia and South Africa, and many are resource-rich but poor African countries. Saudi Arabia aims to develop critical minerals to wean its economy off oil dependence. These countries want to build their own mineral processing capacity for value addition and minerals beneficiation. The strategy of resource nationalism is intended to serve the global climate agenda as well as country-level Sustainable Development Goals.

Putting people and planet first

Besides global and national strategies, there are local concerns for human rights and environmental protection in the race for critical minerals. There is a risk that accelerated mineral exploration and permitting will encroach on land, biodiversity and livelihoods of vulnerable communities, especially First Nations and land-connected peoples. Public finance, such as significant subsidies and grants for critical minerals projects around the world, increases governance risks associated with the extractive industries. Corruption and bribery can occur at different stages of the natural resource governance decision chain, especially at the approvals stage of exploration and mine licensing. In a T20 policy brief to the G20 Brazil last year, the Sustainable Minerals Institute, the South African Institute of International Affairs, Nia Tero and the African Minerals Development Centre proposed charting a people-centred minerals strategy to safeguard indigenous and land-connected communities in the global energy transition.

To secure critical minerals supply chains and unite global support for a just energy transition, G20 leaders should:

1. Endorse the draft Critical Minerals Governance Framework proposed by South Africa’s Department of Minerals and Petroleum Resources;
2. Promote social and environmental safeguards to protect human rights and nature in and around mining and minerals processing, in particular, the rights of Indigenous and land-
   connected peoples and their natural resources;
3. Strengthen the governance of mining and mineral processing grants, subsidies and investments to prevent corruption and the erosion of economic benefits of critical minerals development; and
4. Pledge financial support for the creation of the Global Mining Legacy Fund to remediate abandoned mines and improve mine closure environmental and social practices, as proposed by the United Nations Secretary
   General’s Panel on Critical Energy Transition Minerals.