To meet the rising demand for clean energy technologies, the production of minerals such as lithium, copper, and cobalt could increase by as much as 500% by 2050, and countries will be seeking to strengthen and secure domestic critical mineral supply chains. Yet, because mining, mineral refinements and their externalities are location-specific, creating globally relevant treaties and standards for the industry will be nearly impossible. To deal with this changing landscape, governments are increasingly turning to bilateral and multilateral channels for input and cooperation, rather than waiting for global regulations, providing mining companies and industry organizations with opportunities to participate in and help shape these conversations.
Major multilateral forums, such as the United Nations Framework Convention on Climate Change’s annual Conference of the Parties (COP), provide a platform for governments to share plans and clarify priorities, coordinate with other states, and engage with key public and private stakeholders. Although the critical mineral supply chain is just one element of a comprehensive climate change agenda, it is clear that the heavy engagement of the private sector projected for next year’s COP28, combined with the current geopolitical context, will spur discussions about the sector’s role in the energy transition – which includes supply chains and critical mineral mining.
Other multilateral initiatives are more focused on the mining industry specifically. Notably, these include the Mineral Securities Partnership (MSP), an ambitious initiative announced in June 2022 by the United States (US) and key partner countries[i] to bolster critical mineral supply chains and reduce dependency on China; the US-EU Trade and Technology Council’s (TTC) Secure Supply Chains Working Group, which seeks to maintain close cooperation on resilient and trusted supply chains to further common economic and security goals and strengthen capacities to respond to international disasters and emergencies; and the Quadrilateral Security Dialogue (Quad), a strategic dialogue between the US, India, Japan, and Australia.
Work within the Quad and the TTC to define critical mineral priorities remains in early stages, presenting an opportunity for investors and producers to provide input on key challenges in critical minerals supply chains where government support could be additive to increased extraction and diversified processing. During the 2022 Quad Summit, US Secretary of Energy Jennifer Granholm announced her plans to meet with Quad energy ministers to develop a 10-Year Clean Energy Supply Chain Plan. Within the TTC, the critical technology focus to date has primarily been around semiconductors. However, the Ukraine crisis has elevated awareness of the risk of supply chain disruptions, including to battery mineral supply chains.
The US, Canada, Australia, and Europe have all been active in these and other multilateral channels. US policymakers in particular have focused on deepening multilateral and bilateral critical minerals relations – including going beyond information sharing to promote the adoption of similar regulations for the sector in an effort to create an operating environment supportive of investment and diversification.
Since most multilateral efforts are still nascent, much of the collaboration has been happening in bilateral groups, such as the US-Korea Economic Security Dialogue to coordinate policy on cutting-edge technologies and supply chains, and the US-Canada Critical Minerals Working Group to strengthen cooperation on critical minerals supply chains. Several of these bilateral initiatives prioritize strengthening critical minerals supply chains, while others are focused on critical technologies with limited engagement on minerals to date.
Private sector approach
For companies and private investors interested in engaging, there are several possible approaches. The first is direct interaction with policymakers, many of whom are eager to draw on private sector expertise to strengthen critical minerals supply chains. Mining companies could, for example, help policymakers define where and when government involvement would have the most impact in unlocking mineral production and processing.
Another approach involves leveraging industry groups and associations, which can provide input on behalf of companies and the wider industry through informal consultations, written recommendations, and formal dialogue. Some examples of national and international organizations include the National Mining Association, World Gold Council, Mining Association of Canada, Copper Alliance, and International Lithium Association.
A third and growing option is the number of Track 1.5 Dialogues that are focusing on critical mineral supply chains. These dialogues present a unique platform for private sector leaders and subject-matter experts to engage with government officials in an open and private environment.
The opportunities for mining companies to engage stakeholders in multilateral initiatives will increase as governments seek to accelerate the energy transition. The mining industry must understand the importance of shaping these conversations moving forward.
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[i] Australia, Canada, Finland, France, Germany, Japan, the Republic of Korea, Sweden, the United Kingdom, and the European Commission.