• 27.11.2023
  • IFIs
  • Array

A new report by TrendAsia and Recourse urges International Finance Institutions (IFIs) to ensure human rights and environmental justice are at the heart of the transition minerals supply chain. The report explores the reality for mining and supply chains of transition minerals needed for renewable energy expansion in the coming decades. It shows that taking the current approach to mineral mining will set up new social and environmental crises for countries in the Global South, adding to the climate emergency instead of solving it. 

We ask, how can the just transition to renewable energy ensure careful, contemplative, and intelligent development of mineral supply chains so that it treads lightly on people and planet?

And specifically we ask, how can International Finance Institutions (IFIs) play a role in ensuring human rights and environmental justice are at the heart of the transition mineral supply chain, so that mineral rich communities and countries can benefit from their natural resources, and not be harmed?

The paper explores these key questions and highlights a number of case studies to illustrate emerging concerns in projects supported by the International Finance Corporation (IFC). These case studies include nickel processing in Indonesia, bauxite strip mining in Guinea, lithium extraction in Argentina and cobalt mining in the Democratic Republic of the Congo.

There are different ways that IFIs can respond to the dilemma of the pulling demand for minerals from the Global North, and the threat to people and nature in mineral rich countries of the Global South:

  • Minimise demand: It will be important to plan for less mineral resource consumption across the energy system. While it is inevitable that mineral demand will rise as renewable energy systems expand, it will be critical to plan energy systems that are as resource-light as possible. 
  • Due diligence: Low- and middle-income countries need the capacity to regulate and the authority to hold companies and investors to account for social, environmental, and human rights violations that occur from mining operations, with enforcement of compensation and remediation measures.
  • Mineral sovereignty: Mineral-rich countries should be supported in building out their own mineral sectors as part of just transition plans and creating sustainable industrial strategies to develop their own renewable technologies.
  • Putting communities at the centre: Exploitation of fossil fuels should not give way to exploitation for the energy transition. As the G7, World Bank (WB) and IFIs make plans to secure transition mineral supply chains, it is time they took a perspective that considers and engages with those people whose lands are being earmarked for mineral extraction and whose resources (such as water or air quality) may be impacted.