Thursday, October 28

Mining is the key to a green future, no wonder human rights activists are concerned | Kevin watkins

IInterest in Dogger Bank was once restricted to the insomniac enthusiasts of the BBC Shipping Forecast. No longer. Today, the shallow sandbar located 120 miles off the UK’s northeast coast is home to the world’s largest wind power project. When fully operational, the giant turbines will transmit 3.6 gigawatts (GW) of electricity, enough to power 5 million homes, to the national grid at prices well below current levels.

Welcome to the beginning of the end of the era of fossil fuels. Around the world, solar and wind power now represent the cheapest source of new generation of electricity, and prices are falling. Electric vehicle (EV) batteries are driving oil into obsolescence. Stripped of government subsidies and corporate lobbying for carbon-based fuels are a broken discharge. The future of energy is green, and the future cannot come soon enough to address the climate crisis.

Later this year, governments will meet in Scotland for a climate summit (COP26) aimed at setting the world on track towards achieving the 2015 Paris Agreement goal of keeping the average temperature below 1.5ºC. That will mean a five-fold increase in global renewable energy generation by 2030 on the way to a carbon-free world by mid-century.

Can we decarbonize energy and transportation in time to avoid a climate catastrophe? That will depend in part on the governance of a global mining sector now marred by allegations of human rights abuse, environmental damage and financial corruption.

The renewable energy expansion is a mineral-intensive enterprise. Nature can provide solar radiation and wind providing renewable energy, but the arteries through which electricity flows are made of copper, and a lot. Wind turbine gearboxes require manganese, platinum, and rare earth magnets. Electric vehicle batteries are made from lithium, cobalt and nickel. According to the International Energy Agency (IEA), a midcentury world without carbon will multiply the production of these and other transition minerals by six by 2030. Prices are already rising.

The supply chains through which transition minerals flow are highly concentrated. Small groups of countries – the Democratic Republic of the Congo (cobalt), Indonesia and the Philippines (nickel), Australia and Chile (lithium) – dominate production. But Chinese mining companies are rapidly increasing investments. In processing, China is the city’s main game. Its refining companies account for more than half of the world’s cobalt and lithium production. The global value chains for electric vehicle batteries are dominated from top to bottom by Chinese suppliers. They represent more than 80% of the raw materials for advanced battery materials.

That market structure explains why the prospect of a global mining boom is causing concern among human rights activists. “Make a list of the companies and countries that produce transition minerals,” says Phil Bloomer, director of the Business and Human Rights Resource Center (BHRRC), “and you will have a window on egregious and systematic violations of human rights.” Downtown recently published a poll claiming more than 300 serious accusations against 115 transitional mineral mining companies, ranging from violation of indigenous land rights, to water contamination, threats to health, corruption and a systemic failure to consult local communities.

Water-intensive lithium mining in Chile’s Atacama Desert, the world’s most dire environment, has triggered a wave of water rights legal battles pitting indigenous communities against multinational mining companies. Nickel production in Indonesia and Australia is at the center of the water pollution battles. Cobalt mining in the Democratic Republic of the Congo (DRC) has been linked to allegations of child labor, the financing of armed groups, and industrial-scale corruption that links multinational mining companies to politically connected intermediaries through a complex network. of shell companies abroad.

Current approaches to resource governance have followed a familiar pattern. Publicly traded Western mining companies and users of transition minerals inform shareholders through a bewildering array of voluntary agreements and corporate social responsibility initiatives that cover specific metals, countries, and financial transparency. ESG investors have overwhelmingly focused on the environment and carbon footprint of mining, effectively minimizing human rights.

None of those listed are remotely fit for purpose. The absence of Chinese companies leaves much of the supply chain hidden from view. Financial disclosure on links to foreign listed companies is often limited. Meanwhile, human rights reporting standards are uneven, inconsistent, and sometimes laughable.

Constructive engagement with China is critical to the transition of mining governance. The Biden Administration’s drift toward a geopolitical natural resource nationalism that turns Western countries against Beijing is as shortsighted as it is futile. There are many areas in which Chinese policies need reform, including the use of debt to secure access to minerals in Africa. But for the foreseeable future, many batteries that power electric vehicles, such as your cell phone and PC batteries, are likely to be built through supply chains that link the cobalt mines in the Democratic Republic of the Congo and the mines. of lithium in Chile with factories in China.

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Cop 26 provides an opportunity for the EU, the US and China to forge a new multilateralism. The starting point should be a shift towards mandatory human rights due diligence reports. The EU has already announced its intention to move in this direction, which could open the door to sanctions against companies for failure to comply with due diligence and legal redress for communities. The U.S. Securities and Exchange Commission is similarly planning to make environmental and human rights disclosures mandatory.

None of this is a substitute for effective national governance. But mandatory human rights reporting, along with greater disclosure about shell companies and offshore company ownership, would help raise reporting standards and strengthen the hands of local communities and other rights advocates. humans. The alternative is a wave of activist protest, legal challenge, and investor hesitation that will slow the development of the mineral resources needed to secure our climate future.

That is a result that none of us can afford. With proper governance we can ensure that the green energy revolution does not become a new resource curse for the poor; without it, we all lose.

Kevin Watkins is Executive Director of Save the Children UK.

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