Rush for Crucial Elements: A competition over essential minerals

Rush for Crucial Elements: A competition over essential minerals

The competition among superpowers to secure critical minerals essential for clean energy and digital transitions is intensifying, leading to potential long-term consequences that could shape the future of our world.

Geopolitical Rivalries and Conflicts

As China, the US, and the EU vie for mineral supplies, geopolitical tensions are on the rise. China's near-monopoly over critical minerals, controlling an estimated 60-80%, is viewed as an economic and national security threat by Western powers, leading to trade restrictions and political coercion. This rivalry echoes in other resource-rich zones, such as the Arctic, where territorial disputes and militarization could escalate.

Economic and Security Risks

Dependence on a few dominant suppliers increases vulnerability to supply shocks, export restrictions, and price volatility. This scenario risks disrupting clean energy technology manufacturing and digital infrastructure development globally.

Adverse Effects on Resource-Rich Countries

Mining investments, often by dominant superpowers, may exploit mineral-rich countries in Africa, Latin America, and Central Asia with limited local benefits and environmental harm. The intense extraction and geopolitical jockeying could exacerbate political instability and underdevelopment in these regions.

Barrier to Diversification and Innovation

Heavy concentration of control in processing and supply chains could stymie global efforts to diversify sources and develop alternative technologies or recycling solutions. Western efforts to catch up face significant challenges due to China's trillions spent on investments in critical minerals and their processing capacity.

Need for Government Intervention and Strategic Planning

Countries rich in critical minerals, like Canada, face the challenge of scaling mining and processing to compete globally, requiring substantial government support through co-investments, financing incentives, and policy reforms to reduce risk and attract capital.

Environmental and Social Impact Concerns

Increased mining to meet surging demand, expected to quadruple by 2040, will bring environmental degradation and social challenges unless managed responsibly.

The European Union is seeking mining contracts in the Democratic Republic of the Congo (DRC), known as the "Saudi Arabia of critical minerals." However, many mineral-rich countries are falling short in managing risks raised by resource extraction.

As the race for critical minerals intensifies, governments worldwide are being forced to strategically manage investments and supply chains for clean energy and digital economies. It is crucial for these countries to protect their interests, make the most of their endowments, and ensure a sustainable and equitable future for all.

[1] Rabah Arezki, Director of Research at the French National Center for Scientific Research and a senior fellow at Harvard Kennedy School. [2] Rick van der Ploeg, Professor of Economics at the University of Oxford and University Professor of Environmental Economics at the University of Amsterdam. [3] The International Energy Agency forecasts that demand for critical minerals needed for clean-energy technologies will more than quadruple by 2040. [4] Inward-facing institutions must manage risks raised by resource extraction, including health and environmental damage, labor-rights violations, and child labor. [5] US President Donald Trump has sought to secure critical minerals from countries like Ukraine, Greenland, and Canada. Strengthening institutions is crucial for mineral-rich countries to defend their interests and make the most of their endowments.

1. The escalating competition among superpowers for critical minerals essential for clean energy and digital transitions could shape the future of our world, sparking adverse effects on biodiversity due to deforestation stemming from increased mining activities.
2. Sustainable development goals (SDGs) such as glass 13 (climate action) and 15 (life on land) could be jeopardized due to the increase in carbon emissions caused by the excessive mining of these minerals.
3. The finance industry, particularly impact investors, play a pivotal role in ensuring sustainable and responsible mining practices, aligning investments with the energy transition and prioritizing the mitigation of carbon emissions.
4. The intensifying rivalry among superpowers for critical minerals could lead to conflict and war in resource-rich regions, disrupting mindfulness and personal growth opportunities for individuals living in these areas.
5. Industry leaders in clean energy, digital technology, and electric vehicle manufacturers must prioritize education and self-development to adapt and innovate, addressing the increasing demand for critical minerals and ensuring a productive career development path.
6. Policy and legislation reforms are crucial to curb deforestation and promote sustainable mining practices, balancing the needs of industry, the finance sector, and the environment.
7. Online education platforms and job-search websites could provide education and self-development opportunities for individuals affected by car accidents, fires, or other accidents in resource extraction areas, allowing for lifelong learning and skills training.
8. Crime and justice systems in mineral-rich countries need to address conflicts and corruption related to the mining industry, ensuring fair and equitable general news coverage for all parties involved.
9. As geopolitical tensions rise, education and personal growth initiatives focusing on mindfulness and goal-setting become imperative to promote lifelong learning and adapt to the evolving landscape of clean energy, digital technologies, and geopolitical rivalries.
10. Resource-rich countries must implement policies and regulations to prevent exploitation and environmental harm caused by the mining industry, while fostering local job creation, economic growth, and sustainable development.
11. Governments should prioritize clean energy and digital economy investments in education and skills training to foster a competitive workforce and drive economic prosperity, reducing dependency on imports and increasing energy independence.
12. Conversely, dependence on critical mineral imports could lead to economic vulnerability due to supply shocks or price volatility, impacting the competitiveness of industries and threatening policy decisions related to job creation and career development.
13. Collaboration among superpowers, international organizations, and local communities is essential to prevent conflicts and promote the sustainable and equitable extraction of critical minerals, ensuring a prosperous future for all while prioritizing biodiversity, energy independence, and lifelong learning.

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