The race for critical minerals: a case of ‘move fast and break things’?

Our latest Critical Conversation podcast features Henry Sanderson, author of the widely-praised book ‘Volt Rush’, on the race for battery raw materials to power the energy transition, and its complex geopolitical, environmental and social consequences.

Henry Sanderson covered commodities and mining for the Financial Times for seven years. He is the author of a recent book, ‘Volt Rush: the Winners and Losers in the Race to Go Green’, exploring the scramble for battery raw materials. Henry is currently the executive editor at Benchmark Mineral Intelligence, the provider of data and information on the battery industry. He spent several years in China, where he worked as a Beijing based reporter for Bloomberg News and co-authored a book about China’s financial system and state capitalism called ‘China Superbank’.

This exclusive discussion, recorded on 5th December 2022, was moderated by Daniel Litvin, Founder of Critical Resource and Senior Advisor to the Executive Committee of ERM. Please note, as with our other podcast interviewees, the views expressed by Henry Sanderson do not necessarily reflect the views either of Critical Resource or ERM.

Among the key points raised by Henry:

• Renewable energies like solar and wind have become significantly cheaper – but we’re also seeing increasing problems with their ‘hidden supply chains’. The reduced costs have partly been due to China’s aggressive sourcing and production of the raw materials.
• This speed and scale is essential for the energy transition, but many of the supply chains are dependent on countries like the Democratic Republic of the Congo (DRC), Chile or Indonesia, which in turn changes their role and the dynamic of their geopolitical relationships.
• The social and environmental impacts are concerning. For example, shallow nickel mines in Indonesia heavily damage the ecosystem, while the scale of artisanal mining for cobalt in the DRC results in dangerous conditions – as well as potentially unfair practices and black-market dynamics.
• We need to strike a better and fairer balance between the need to scale up for the energy transition, and the environmental, climate and labor impacts of mining the commodities needed for it. Some initiatives are emerging, including the Global Battery Alliance and the Fair Cobalt Alliance, however the industries involved need to focus harder on this re-balancing.
• The West has been asleep at the wheel while China has already made big strides in developing critical minerals in Africa. The West has also actively helped China by selling some of its best assets to Chinese-owned companies, or helped them expand outside China in general. There is general hostility towards new mines, especially in America and Europe, partly because mining companies and environmentalists cannot agree on what a ‘good mine’ looks like. This issue needs resolving if we are to pursue an accelerated clean energy transition.
• Recycling will become a solution post 2035, especially with the big investments going into that. Until then, with the exponential increase in demand for minerals expected, we need to somehow come up with a solution for supply.