The disturbing truth of the green revolution on mining


If we are to deliver on the promise of renewable energy, we must lift the veil on corrupt governments, dirty environmental practices and excruciating labor violations. The green revolution must accept this inconvenient truth and fight it head-on.

Global demand for clean, renewable energy is growing at an unprecedented rate, driven by technological advancements and falling costs. It is a story of innovation and inspiration, but also of grafting and exploitation.

Media reports detail stories of underage children working in dangerous conditions, polluted landscapes and predatory investors. But it doesn’t have to be.

The Multi-Country Energy Resource Governance Initiative (ERGI) provides countries with best practice tools so that they can contribute to the demand for clean energy while ensuring appropriate standards in the mining sector.

In a decade, the global middle class is expected to grow from 3.5 billion today to 5.3 billion. The middle class will demand cleaner forms of energy. This is certainly a good thing, as cleaner energy improves the quality of life and the productive capacity of countries. However, some clean energy technologies are mineral intensive.

For example, the number of electric vehicles is expected to increase from 5 million today to 125 million in a decade, and they use four or more times the minerals found in a normal car.

The World Bank recognizes this problem with projections that the deployment of battery technologies could increase the demand for minerals by more than 1,000 percent.

Mining is essential. Even renewable energy technologies require a shovel to touch the ground early in their life cycle. According to the International Renewable Energy Agency, “the greatest reserves of metals and minerals needed for renewable technologies are found in weak states with poor governance.”

The international media are increasingly reporting the dark side of these technologies: odious and enslaving conditions, irreplaceable environmental destruction and widespread corruption. Yet the well-intentioned drive to reduce greenhouse gas emissions seldom recognizes these perverse results on the ground.

It would be the worst outcome of all. Countries would lose the investments of responsible companies and feel compelled to enter into deals with predatory actors.

The lure of bribes and quick loans can trap future generations under the weight of widespread corruption and high interest rates, preventing a resource-rich country from obtaining the long-term benefits of its economy. resource endowment.

Resource-rich countries would prefer to do business with world-class operators, but often lack the tools to build sustainable mining sectors. To close this gap, the United States, Canada, Australia, Peru and Botswana formed ERGI to help countries achieve their ambition with best practices in the mining sector.

We recently launched an online “toolkit” that provides practical and actionable steps for countries to better understand their resource endowments. It describes the mineral rental options and details the classification of mining assets according to the standards in force.

As noted, demand for clean energy is skyrocketing as support for mining shrinks. The Toolkit seeks to stop this trend by showing governments how to put in place the right conditions for obtaining a social license to operate.

The ERGI toolkit is now accessible to the public, so that interested businesses and consumer groups can also transparently engage in promoting governance principles, sharing best practices and promoting a level playing field in the energy minerals process.

The United States encourages others to join us in raising awareness of the magnitude of this problem and, if not properly managed, the very real challenges presented by the demand for these minerals.

We should all consider how and where minerals are obtained when making purchasing decisions in the energy sector. Do they come from a mining process that harms the environment or exploits work practices? Have they fueled conflict or corruption? Do they support local communities? These issues should be of deep concern to us, as the environmental and societal damage caused by poorly done mining is severe and short-term.

Francis R Fannon is Assistant Secretary, Bureau of Energy Resources, US Department of State

The Commodities Note is an online commentary on the Financial Time industry

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