Critical Minerals and Climate: Challenges for the Clean Energy Transition

Copper is one of the critical minerals that are essential to clean energy technology.

The USGS considers 50 minerals to be critical to the U.S. economy and national security. These critical minerals are used in the production of countless products and technologies globally, making this industry highly sensitive to supply chain disruption. In addition, many of these minerals, such as nickel, cobalt, and copper, are essential components of clean energy technology. Mining and the production of critical minerals has jumpstarted in the last decade as demand for green energy sources, such as solar panels and electric vehicles, has increased. To meet rapidly growing demand, mining critical and rare earth minerals will require new infrastructure and legislation that allows for growth while preventing the exacerbation of social and environmental damages associated with mining in the past.  

Increased mining will present different, yet significant, challenges to national security and economic stability as fossil fuel extraction has for decades. There is also a legacy of geopolitical conflict and human rights violations associated with mining that must be considered as the global economy moves towards increased production. Already, we have seen this geopolitical tension play out with supply chain disruptions due to the Russian invasion of Ukraine. This conflict has had major effects on industrial base metals like aluminum and nickel, as well as “strategic” minerals like palladium, scandium, and titanium. Nickel prices in Russia spiked over 100% within two weeks of the invasion last February, after sanctions were introduced. There is also concern over the U.S.’s tense relationship with China, which possesses the world's largest concentration of government-controlled metal reserves.  

In addition to rising geopolitical tension, increased mining, especially in developing countries, poses negative social and environmental impacts to already vulnerable regions and communities. In the past, mining has been notorious for unsafe labor conditions and unsustainable land use practices. While mining may provide economic benefits to countries, businesses, and communities, the climate-driven clean energy transition must also insulate the mining sector from corruption and responsibly manage risks.   

Governance of this sector must also consider that many of these critical minerals have drastically different uses, source regions, and market values. For example, half of the projected demand for critical minerals by 2050 is for copper, necessitating a further understanding of the specific uses and projections for each mineral economy, rather than a general resilience plan for the industry. New developments, such as the World Bank’s Climate-Smart Mining Initiative, are beginning to provide support to resource-rich countries where communities are directly affected by mineral extraction. Further collaboration and dialogue with stakeholders and communities in mining regions may help to prevent the path of community exploitation that has characterized fossil fuel extraction since the beginning of the industrial age.  

These intersecting challenges illustrate the mining sector’s high sensitivity to the effects of geopolitical conflict and supply chain instability, which is further destabilized by the effects of climate change. Mining is a crucial component of the clean energy transition, necessitating policies that deeply consider local communities and environmental risks as production in this extractive industry inevitably increases.

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