Energy transition and poor governance of strategic minerals: risks for African countries with a low Human Development Index (HDI)

Written by Joséphine Maidjane Mbara

Extractive Industries Programme Assistant, RELUFA

 Since the publication of the 1987 Brundtland Commission report “Our Common Future” which gave rise to the concept of sustainable development, the current global emergency is to protect the environment, in this case by combating global warming. This new paradigm calls for a depletion in greenhouse gas emissions, in other words, an energy transition from fossil fuels to renewable energies. From the 8th to the 10th of June 2023, Senegal hosted the Publish What You Pay (PWYP) Africa 2023 conference in Saly under the theme: “Towards a collaborative and fair energy transition for Africa”. Immediately afterward, the ninth Global Conference of the Extractive Industries Transparency Initiative (EITI) took place in Dakar on the theme of “Transparency in Transition“. These two key events paved the way for reflection on an energy transition that will not further widen social inequalities and accentuate poverty in African countries, the major suppliers of critical minerals essential for renewable energies. African civil society organizations, whether members of EITI multistakeholder groups or PWYP national coalitions are concerned by this emerging theme of energy transition and the governance of so-called critical or transition minerals. As such, the Réseau de Lutte contre la Faim (RELUFA), a Cameroonian civil society organization, participated in these two international meetings.   Following these conferences and an analysis of the Human Development Index (HDI) 2022 report published by the United Nations Development Programme (UNDP), RELUFA poses the following question: as things stand, is the governance of natural resources in Africa conducive to improving the HDI of countries rich in transition minerals?

At first glance, renewable energies appear to be a godsend for African countries rich in strategic minerals. By 2040, renewable energies should be the world’s leading source of energy supply, accounting for 75% of new electricity generation in Africa, given the enormous potential of mineral resources such as lithium, cobalt, graphite, nickel, manganese, and bauxite. Not forgetting natural resources i.e., the sun, wind, and water. It is worthy of note that most of these critical minerals are used in the manufacture of solar panels, wind power, and electric vehicle batteries. The International Energy Agency (IEA) predicts that by 2040, demand for lithium, for example, will exceed 40 million tonnes. These trends should stimulate economic growth in African countries endowed with these minerals and improve the standard of living of their populations, especially local communities. However, the state of governance in several countries, as reflected in their HDI, does not reassure us about a fair and equitable energy transition. The “resource curse”, a concept that has been used since the 1990s to express the paradox between the abundance of natural resources and the poverty of African countries, has also made its transition. The UNDP now talks of “green resource curses“. Data from the Natural Resource Governance Institute (NRGI) and the United Nations Development Programme (UNDP) show that critical minerals, essential for renewable energies, are found in countries with low and medium Human Development Indices (HDI) (UNDP HDI 2022 Report).

Figure: These are not the only critical minerals found in these countries. Those shown on the map are for illustrative purposes only.

As a result, the path to a fair and equitable energy transition is hypothetical, with the risk that poor governance of critical minerals and renewable energies will further deteriorate people’s living conditions. An international organization such as NRGI is already warning of the effects of corruption in the critical minerals supply chain (NRGI, Preventing Corruption in Energy Transition Mineral Supply Chains, 2022). For example, in a country like the Democratic Republic of Congo (DRC), an audit of the state-owned mining company between 2010 and 2020 revealed a loss of US$400 million in cobalt and copper mining projects. Other corruption scandals in the country have involved renewable energy giants such as Tesla, General Motors, and Samsung and LG Ghem caused losses to the Congolese state of around 1.36 billion US dollars, in a country with a very low HDI of 0.479.

Apart from the issue of corruption, critical minerals, and renewable energies carry the risk of fuelling conflict. Implementation of renewable energy projects to exploit transitional minerals can lead to dispossession and conflicts fuelled by tensions over land acquisition, poor [local] employment opportunities, and benefit-sharing between operators and communities, not to mention communities’ difficult access to energy sources. In its HDI report, the UNDP states that: “a recent mapping of renewable energy projects and conflict zones in five African countries revealed a strong correlation between the two. The proximity of a renewable energy site is strongly associated with a higher risk of conflict for all green activities”. Ultimately, the governance of critical minerals and renewable energies must be (re)thought through to avoid a deterioration in standards of living populations in countries where the HDI is already low. Governments, extractive sector companies, and civil society all have a role to play here.

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