EITI Calls for Stronger Mineral Governance in Energy Transition

A new report has urged for the strengthening of governance of mineral value chains for the energy transition. It demonstrates that the Extractive Industries Transparency Initiative EITI-implementing countries account for a substantial share of transition minerals mining.

Uganda is among the EITI member countries with a lot of the transition minerals like cobalt, cobalt, and tantalum among others. Uganda has just passed the Mining and Minerals Act as part of the effort to strengthen the regulation of mining and mineral governance.

The new minerals law in Uganda also provides for the beneficiation of minerals like Cobalt, Tin, and tantalum in order to derive more value.  

The report by EITI highlights the relationship between global energy transition objectives and the need for stronger mining sector governance at the national and local levels.  

The study, undertaken by the Sustainable Minerals Institute of the University of Queensland and funded by USAID, identifies key risk areas in the value chains of minerals needed for low-carbon energy technologies.   Spanning across global, transnational, national, and sub-national levels of mineral governance, these risks are manifold, ranging from environmental impacts and corrupt deals to price shocks and disruptions in global supply chains.  

If not addressed, these risks could hinder the sector’s contribution to sustainable development, impede energy security and access, and inhibit the fight against climate change, especially as countries face a growing demand for transition minerals.

The study provides recommendations on how to mitigate governance risks through policy actions, advocacy, analysis, and partnerships.  

“The boom-and-bust nature of demand creates an imperative for strengthening the governance of mineral value chains, to ensure that the means of production are consistent with the ends to which minerals are used for the benefit of people and the planet,” says Rt Hon. Helen Clark, EITI Board Chair and former Prime Minister of New Zealand, in her foreword to the report.  

 This study, commissioned by the EITI, provides an overview of the global value chains of selected transition minerals and highlights the relationship between global energy transition objectives and the need for stronger minerals sector governance.

According to the report, low-carbon power generation and electrification are having a profound impact on the demand for transition minerals. As the global energy transition accelerates, low-carbon energy technologies will experience rapidly growing markets, driving growth in the demand for a range of minerals. 

A substantial part of the growing demand for transition minerals will likely be satisfied by EITI-implementing countries, many of which hold large shares of identified mineral reserves and resources. Some EITI countries are already major exporters of transition minerals, and many may see this trade flows increase in the coming decades.   

Increased demand for transition minerals is bringing about risks for diverse stakeholders which, if not addressed, could hinder the sector’s contribution to sustainable development and inhibit the fight against climate change.  

Spanning across global, transnational, national, and sub-national levels of mineral governance, these risks are manifold, ranging from environmental impacts and corrupt deals to price shocks and disruptions in global supply chains. Yet there are numerous opportunities to address these risks. In resource-rich countries, there is an opportunity to improve governance frameworks and transparency to attract investment in the extraction and beneficiation of transition minerals.  

The report released at the sidelines of the ongoing International Mining and Resources Conference in Australia said there is also an opportunity for the industry to collaborate in the development of value chains from mining to the manufacturing and deployment of energy transition technologies.

For governments and consumers in countries importing transition minerals, the report says there is also an opportunity for companies in transition mineral value chains to use voluntary standards to certify their environmental, social, and governance (ESG) performance and meet their supplier due diligence requirements. 

At the global level, there is an opportunity for greater international and regional cooperation to ensure that transition minerals contribute to a just energy transition.

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