On October 27, 2023, the Global South in the World Order network engaged in the Climate Talks, a series of discussions on the nexus between climate change on the one hand and peacekeeping, finance, and gender issues on the other hand, sponsored by the Embassy of Germany in the United States.
The network explored the challenges associated with the extraction of critical minerals — specifically, copper, lithium, cobalt, nickel, and rare-earth metals, which are used in clean-energy technology — and the various hurdles Global South countries face as the world pursues the green transition. While stakeholders in both the West and the Global South are acutely aware of the threat posed by climate change, political leaders and private actors often turn a blind eye to the collateral damage of extractive mining practices on local ecosystems and populations.
A prevalent assumption across the West is that, with enough political will and financial capital, every person across the world — and in the West especially — could, and should, have access to an electric vehicle (EV) and other renewable energy technology. This assumption leads to a necessary dependence on various Global South countries that host vast reserves of critical minerals. Lithium, for example, is a core material in many common rechargeable batteries, and an estimated 58% of the world’s lithium reserves can be found within the “Lithium Triangle” in Argentina, Bolivia, and Chile. In the case of cobalt, roughly half of the world’s reserves are estimated to be in the Democratic Republic of the Congo (DRC), with the country accounting for nearly 70% of global production in 2021.
Stakeholders across the board — including scientists, policymakers, private companies, and international organizations — have a responsibility to ensure that the green transition, which is dependent on critical mineral extractivism and downstream processing, does not lead to the further endangerment of ecosystems and the violation of human rights. Yet, these actors are failing to abide by this principle. On the one hand, existing international and national standards set by mineral-consuming countries are either insufficient or lack effective enforcement and monitoring. On the other hand, relatively lax — or simply absent — regulatory systems in place in some producer countries allow companies to skirt responsibility by exploiting loopholes. Ensuring access to information for local communities and the inclusion of local communities in mining projects remain the most consistently ignored standards across the globe, setting the foundation for future violations. Among the tools used by Western political actors, the European Union (EU) relies on company certifications to address poor mining governance, but these have proved to be ineffective and counterproductive, shifting the responsibility to implement the rule of law away from governments to private companies, which operate according to their own economic interests.
Instead, stakeholders must work with the civil society groups and impacted communities because they are the best positioned to inform policy. This should be done through cooperation to strengthen existing — or develop new — regulations, deepen accountability, and build justice frameworks, both for private companies and for state actors engaging in the extraction of critical minerals. Such policies, particularly those targeted at government bodies, cannot be solely punitive. There must also be incentives to ensure that all stakeholders see the benefits of partaking in good governance to ensure sustainable buy-in.
The Role of the State and Private Companies
Pía Marchegiani, Director of Environmental Policy and Deputy Executive Director, Fundación Ambiente y Recursos Naturales
Argentina, Chile, and Bolivia’s high-Andean wetlands hold around 53% of the world’s lithium reserves. These ecosystems are very fragile, subject to water scarcity throughout the year, and are home to several indigenous communities. Argentina is the only one of these three countries in which lithium can be accessed through concession, and the fourth-largest producer in the world — behind Australia, Chile, and China. As a federal state, its provinces authorize and control mining activities. The state’s current pipeline accounts for around 36 projects, eight of which might start producing lithium in the next three years.
The Argentinian central administration and the provincial governments face a high debt and a macroeconomic crisis — with more than 100% interannual inflation rates. They perceive the high price and increasing global interest in lithium as an opportunity to attract investments.
Therefore, the governing authorities prioritize project authorizations without conducting adequate environmental and human rights analysis, which ultimately leads to breaches of national and international regulations. Provincial authorities lack the political will to conduct due diligence and the knowledge and data on the role that high-Andean wetlands play for climate adaptation and mitigation strategies, including their ability to sequestrate carbon. They do not invest sufficient time and resources in environmental planning strategies, which require complex but necessary hydrological studies. Such analyses should be used as baseline studies before engaging in any mining projects. These analyses include, for instance, understanding the relationship between different types of water — such as freshwater, brines, ten-to-100,000-year-old fossil waters, and modern water. This crucial analytical pre-investment process must also integrate the cumulative effects of other co-existing mining projects and of existing water use by communities in the same watersheds. Political authorities must, in theory, use this critical data to determine whether and where mining operations can be carried out without causing irreversible damage to the environment and communities’ livelihoods.
In addition, the state often does not seek unrestricted, informed consent from impacted populations prior to the execution of projects, despite it being a fundamental right of indigenous peoples, who existed and lived on mineral-rich lands before the creation of the nation-state. These processes should be led by the state and follow certain international standards — such as accessible and unbiased information campaigns for affected populations, the respect for individual rights, protection from coercion, as well as culturally appropriate mechanisms and dialogues — to be properly implemented and thus, respect the right to self-determination of indigenous communities.
In light of the increasing resistance to, and conflicts around, lithium extraction in several sub-regions of Argentina, Bolivia, and Chile, Western consumer countries are increasingly paying attention to mining-related socio-environmental challenges and making more efforts to ensure that corporate stakeholders throughout the supply chain abide by their responsibility of due diligence. For instance, France and Germany have passed regulations on due diligence along the supply chain.
However, accountability must not exclusively rely on the goodwill of companies, private regulations, certifications, and industry schemes used to attest to compliance, as proposed and implemented by the corporate sector. For supply chains to respect national and international standards and human rights, the private sector must refrain from taking on the role of the state, even when policy gaps create regulatory, enforcement, monitoring, or accountability vacuums.
To address these gaps, both consumer and producer countries should strengthen and deepen cooperation to foster win-win relationships that will ultimately serve the global response to climate change. This cooperation should notably include knowledge and technical transfers that will enable producer countries in the Global South to implement regulations and safeguards, process the resources, and turn them into end-use products.
Finally, it is critical that Global North powers commit to an overall reduction of energy and natural resources consumption during their energy transition. Major powers’ policies — from climate to investment and security — should integrate the complexity and intertwining nature of the various dimensions involved: mobility, energy, urban planning, recycling, and the circular economy. To that end, it is essential that major powers strive to move away from a race for global hegemony—as the United States currently seeks through great-power competition with China — and/or disputes over resources and technology.
Natural Resources and the Economies of Violence
Guillaume Soto-Mayor, Nonresident Scholar, Middle East Institute, @GuillaumeMayor
Amidst global efforts to spur the green transition, notably through technology dependent on critical minerals, the links between the extraction and sale of these natural resources and violence have been swept under the rug by major powers in the international community. This can be referred to as the economies of violence —violent acts, whether licit, illicit, or illegal, perpetrated for the purpose of making a profit. Left unaddressed, the economies of violence will undermine human rights and democracy, and hamper efforts to address the climate crisis.
The nexus between critical minerals and the main consumer markets, primarily in the West, involves a complex network of actors that includes legal and licit companies, political actors, mercenaries, and criminal organizations and armed groups, located both in the West and in the Global South, which collude and/or turn a blind eye to illicit economic and financial flows. In a globalized economic system, increased mobility of goods, capital, and people; efficient transportation; and internet technologies have reinforced the links between natural resources and violence in countries such as Afghanistan, the Central African Republic, the DRC, Myanmar, and the Northern Triangle of Central America—Guatemala, Honduras, and El Salvador.
These links reflect how powerful economic industries, often with direct or indirect government support, perpetuate wars and empower warlords in Africa, Asia, and South America by bringing illegally acquired natural resources into legitimate trade. Thus, some Western companies and financial institutions, notably large banks—as the Hong Kong and Shanghai Banking Corporation (HSBC) scandal revealed — have turned a blind eye to the origins of natural resources, directly and indirectly supporting warlords and criminal enterprises profiting from them. In addition, essential components of the neoliberal financial systems have facilitated these illicit operations: freeports, originally intended for tax-free storage and transit of goods, have been used by warlords to sell illegally acquired critical minerals worldwide, mostly to private companies, and launder subsequent profit thanks to tax havens.
Hence, the journey of conflict minerals from mines to end products reveals the lack of willingness of the international community to regulate and halt this illicit trade, which is marred by violence and bribery, perpetrated by both licit and illicit actors. Major powers operating in other countries, such as the United States in Afghanistan, have sometimes downplayed the importance and consequences of warlords’ involvement in illegal economies to justify their military cooperation with them. Existing control mechanisms, like the United Nations’ Kimberley Process, which focuses on “conflict diamonds,” and the International Tin Association’s International Tin Supply Chain Initiative, have proven ineffective owing to inadequate resources and heavy reliance on government and corporate goodwill. These systems often fail to verify the true origin of minerals, allowing warlords to exploit them. In many cases, with the support of corrupt government officials, traced minerals are falsely attributed to validated but inactive mines, thus concealing their true origin in militia-controlled areas.
In essence, the global economy’s shortcomings in regulating the trade of conflict minerals allow warlords to profit while perpetuating violence and instability. By actively engaging in these illicit dynamics and failing to take action, public and private licit and legal actors, both at the national and international levels, are undermining efforts to address the pitfalls of critical minerals trade. This situation impedes steps to solve the wider climate crisis and perpetuates violence worldwide, all while undermining mineral-producer countries’ development and prosperity.
Environmental, Social, and Governance Factors Are Essential for Nickel Industries’ Long-Term Economic Benefits
Fabby Tumiwa, Executive Director, Institute for Essential Services Reform
Indonesia, with its 21 million tons of nickel reserves — 22% of the world’s total — is the world’s largest nickel producer. In 2022, the country produced 1.6 million metric tons of nickel, half of global production. Indonesia prioritizes nickel downstreaming — processing the ore into an end product — as it seeks to become a battery supply chain hub. But this policy has a dire impact in terms of environmental, social, and governance (ESG) factors. The Indonesian government and its foreign public and private partners must make strong policy decisions to address this challenge for the sake of human, environmental, and economic prosperity.
Since 2009, Indonesia has undertaken a series of measures to boost its mineral processing industry, from the adoption of the Coal and Mineral Law in 2009 and its strengthening in 2020 to successive bans of raw mineral export from 2014. These bans notably led the EU in 2019 to launch a dispute at the World Trade Organization (WTO), claiming that the restrictions unfairly limited nickel ore access for EU producers. The WTO ruled in favor of the plaintiff in 2022, and Indonesia appealed the decision. Nonetheless, the export ban has led to a sharp increase in Indonesian mineral processing foreign investment, reaching $53.3 billion in 2023, and to the proliferation of nickel processing smelters in the country, notably thanks to Chinese companies’ investments. Illustratively, Indonesia established an EV battery supply chain to respond to the demand for EVs.
However, to become a global battery supply chain hub, Indonesia requires high-grade nickel to produce class-1 nickel products critical to electrical vehicle batteries. This puts at risk Indonesia’s nickel ore reserves, which would be depleted within 10 years if the country were to increase its smelting capacity. Moreover, production methodologies used in Indonesia, such as high-pressure acid leaching, have a severe impact on the environment. They also require complex waste-disposal management technologies, which in turn demand higher investment costs from private investors. Additionally, refining nickel ore is energy-intensive, and most smelter owners use coal-fired power plants, which impedes the achievement of Indonesia’s Just Energy Transition Partnership emission targets. Indonesian class-1 nickel production emits two to six times more carbon dioxide than Class 2. Skarn Associates reports that each ton of metal produced leads to the emission of 58.6 tons of CO2, compared to 48 tons globally.
Amidst increasing concerns over the impact of the production of nickel for batteries on ESG factors, in March 2023, Indonesian President Joko Widodo visited Vale Indonesia’s mining and smelter operations and committed to improving nickel-mining environmental standards. He pledged that his government would, in the future, only approve new smelter permits if companies used renewable energy. Since this announcement, however, the government has not taken any significant steps to reduce nickel processing’s environmental impact — this move would notably raise investment costs and act as an entry barrier for foreign investors.
If Indonesia wants to become a major player in the global EV supply chain, to access US and EU markets and reduce its dependency on China, it is critical that its government addresses ESG concerns. On November 13, President Joko Widodo and U.S. President Joe Biden discussed how to improve the critical-mineral supply chain. This was an opportunity for the United States and Indonesia to promote transparency and sustainability in the global EV supply chain. Both leaders agreed to create a critical mineral action plan as part of critical mineral agreement negotiations.
The first step is asking miners and smelter companies to follow industry-recognized responsible mining standards. The government must also encourage all operating smelters to reduce their environmental impact, process tailings waste according to standards, and control land clearing for open pit mining. Communicating this new approach to all parties, including future investors will build understanding and support.
If the Indonesian government fails to improve ESG indicators, investment in mining extraction and processing will continue to impact the environment, deter human and development progress, create inequality, and ultimately cost much more than the direct economic benefits of these investments.
Critical Minerals: The Not-So-Green Side of the Green Transition
Global South Experts Turn the Tables
By Aude Darnal Lead Author • Pía Marchegiani • Hunter Slingbaum • Guillaume Soto-Mayor • Fabby Tumiwa
Grand Strategy
Every month, The Global South in the World Order Project convenes a meeting of experts from across the Global South to discuss international relations from their perspectives, disrupt conventional thinking, and inject non-Western viewpoints into prominent policy circles in Washington. This publication is part of the Global South Experts Turn-the-Tables series, which highlights insights from select participants in these discussions.
On October 27, 2023, the Global South in the World Order network engaged in the Climate Talks, a series of discussions on the nexus between climate change on the one hand and peacekeeping, finance, and gender issues on the other hand, sponsored by the Embassy of Germany in the United States.
The network explored the challenges associated with the extraction of critical minerals — specifically, copper, lithium, cobalt, nickel, and rare-earth metals, which are used in clean-energy technology — and the various hurdles Global South countries face as the world pursues the green transition. While stakeholders in both the West and the Global South are acutely aware of the threat posed by climate change, political leaders and private actors often turn a blind eye to the collateral damage of extractive mining practices on local ecosystems and populations.
A prevalent assumption across the West is that, with enough political will and financial capital, every person across the world — and in the West especially — could, and should, have access to an electric vehicle (EV) and other renewable energy technology. This assumption leads to a necessary dependence on various Global South countries that host vast reserves of critical minerals. Lithium, for example, is a core material in many common rechargeable batteries, and an estimated 58% of the world’s lithium reserves can be found within the “Lithium Triangle” in Argentina, Bolivia, and Chile. In the case of cobalt, roughly half of the world’s reserves are estimated to be in the Democratic Republic of the Congo (DRC), with the country accounting for nearly 70% of global production in 2021.
Stakeholders across the board — including scientists, policymakers, private companies, and international organizations — have a responsibility to ensure that the green transition, which is dependent on critical mineral extractivism and downstream processing, does not lead to the further endangerment of ecosystems and the violation of human rights. Yet, these actors are failing to abide by this principle. On the one hand, existing international and national standards set by mineral-consuming countries are either insufficient or lack effective enforcement and monitoring. On the other hand, relatively lax — or simply absent — regulatory systems in place in some producer countries allow companies to skirt responsibility by exploiting loopholes. Ensuring access to information for local communities and the inclusion of local communities in mining projects remain the most consistently ignored standards across the globe, setting the foundation for future violations. Among the tools used by Western political actors, the European Union (EU) relies on company certifications to address poor mining governance, but these have proved to be ineffective and counterproductive, shifting the responsibility to implement the rule of law away from governments to private companies, which operate according to their own economic interests.
Instead, stakeholders must work with the civil society groups and impacted communities because they are the best positioned to inform policy. This should be done through cooperation to strengthen existing — or develop new — regulations, deepen accountability, and build justice frameworks, both for private companies and for state actors engaging in the extraction of critical minerals. Such policies, particularly those targeted at government bodies, cannot be solely punitive. There must also be incentives to ensure that all stakeholders see the benefits of partaking in good governance to ensure sustainable buy-in.
The Role of the State and Private Companies
Pía Marchegiani, Director of Environmental Policy and Deputy Executive Director, Fundación Ambiente y Recursos Naturales
Argentina, Chile, and Bolivia’s high-Andean wetlands hold around 53% of the world’s lithium reserves. These ecosystems are very fragile, subject to water scarcity throughout the year, and are home to several indigenous communities. Argentina is the only one of these three countries in which lithium can be accessed through concession, and the fourth-largest producer in the world — behind Australia, Chile, and China. As a federal state, its provinces authorize and control mining activities. The state’s current pipeline accounts for around 36 projects, eight of which might start producing lithium in the next three years.
The Argentinian central administration and the provincial governments face a high debt and a macroeconomic crisis — with more than 100% interannual inflation rates. They perceive the high price and increasing global interest in lithium as an opportunity to attract investments.
Therefore, the governing authorities prioritize project authorizations without conducting adequate environmental and human rights analysis, which ultimately leads to breaches of national and international regulations. Provincial authorities lack the political will to conduct due diligence and the knowledge and data on the role that high-Andean wetlands play for climate adaptation and mitigation strategies, including their ability to sequestrate carbon. They do not invest sufficient time and resources in environmental planning strategies, which require complex but necessary hydrological studies. Such analyses should be used as baseline studies before engaging in any mining projects. These analyses include, for instance, understanding the relationship between different types of water — such as freshwater, brines, ten-to-100,000-year-old fossil waters, and modern water. This crucial analytical pre-investment process must also integrate the cumulative effects of other co-existing mining projects and of existing water use by communities in the same watersheds. Political authorities must, in theory, use this critical data to determine whether and where mining operations can be carried out without causing irreversible damage to the environment and communities’ livelihoods.
In addition, the state often does not seek unrestricted, informed consent from impacted populations prior to the execution of projects, despite it being a fundamental right of indigenous peoples, who existed and lived on mineral-rich lands before the creation of the nation-state. These processes should be led by the state and follow certain international standards — such as accessible and unbiased information campaigns for affected populations, the respect for individual rights, protection from coercion, as well as culturally appropriate mechanisms and dialogues — to be properly implemented and thus, respect the right to self-determination of indigenous communities.
In light of the increasing resistance to, and conflicts around, lithium extraction in several sub-regions of Argentina, Bolivia, and Chile, Western consumer countries are increasingly paying attention to mining-related socio-environmental challenges and making more efforts to ensure that corporate stakeholders throughout the supply chain abide by their responsibility of due diligence. For instance, France and Germany have passed regulations on due diligence along the supply chain.
However, accountability must not exclusively rely on the goodwill of companies, private regulations, certifications, and industry schemes used to attest to compliance, as proposed and implemented by the corporate sector. For supply chains to respect national and international standards and human rights, the private sector must refrain from taking on the role of the state, even when policy gaps create regulatory, enforcement, monitoring, or accountability vacuums.
To address these gaps, both consumer and producer countries should strengthen and deepen cooperation to foster win-win relationships that will ultimately serve the global response to climate change. This cooperation should notably include knowledge and technical transfers that will enable producer countries in the Global South to implement regulations and safeguards, process the resources, and turn them into end-use products.
Finally, it is critical that Global North powers commit to an overall reduction of energy and natural resources consumption during their energy transition. Major powers’ policies — from climate to investment and security — should integrate the complexity and intertwining nature of the various dimensions involved: mobility, energy, urban planning, recycling, and the circular economy. To that end, it is essential that major powers strive to move away from a race for global hegemony—as the United States currently seeks through great-power competition with China — and/or disputes over resources and technology.
Natural Resources and the Economies of Violence
Guillaume Soto-Mayor, Nonresident Scholar, Middle East Institute, @GuillaumeMayor
Amidst global efforts to spur the green transition, notably through technology dependent on critical minerals, the links between the extraction and sale of these natural resources and violence have been swept under the rug by major powers in the international community. This can be referred to as the economies of violence —violent acts, whether licit, illicit, or illegal, perpetrated for the purpose of making a profit. Left unaddressed, the economies of violence will undermine human rights and democracy, and hamper efforts to address the climate crisis.
The nexus between critical minerals and the main consumer markets, primarily in the West, involves a complex network of actors that includes legal and licit companies, political actors, mercenaries, and criminal organizations and armed groups, located both in the West and in the Global South, which collude and/or turn a blind eye to illicit economic and financial flows. In a globalized economic system, increased mobility of goods, capital, and people; efficient transportation; and internet technologies have reinforced the links between natural resources and violence in countries such as Afghanistan, the Central African Republic, the DRC, Myanmar, and the Northern Triangle of Central America—Guatemala, Honduras, and El Salvador.
These links reflect how powerful economic industries, often with direct or indirect government support, perpetuate wars and empower warlords in Africa, Asia, and South America by bringing illegally acquired natural resources into legitimate trade. Thus, some Western companies and financial institutions, notably large banks—as the Hong Kong and Shanghai Banking Corporation (HSBC) scandal revealed — have turned a blind eye to the origins of natural resources, directly and indirectly supporting warlords and criminal enterprises profiting from them. In addition, essential components of the neoliberal financial systems have facilitated these illicit operations: freeports, originally intended for tax-free storage and transit of goods, have been used by warlords to sell illegally acquired critical minerals worldwide, mostly to private companies, and launder subsequent profit thanks to tax havens.
Hence, the journey of conflict minerals from mines to end products reveals the lack of willingness of the international community to regulate and halt this illicit trade, which is marred by violence and bribery, perpetrated by both licit and illicit actors. Major powers operating in other countries, such as the United States in Afghanistan, have sometimes downplayed the importance and consequences of warlords’ involvement in illegal economies to justify their military cooperation with them. Existing control mechanisms, like the United Nations’ Kimberley Process, which focuses on “conflict diamonds,” and the International Tin Association’s International Tin Supply Chain Initiative, have proven ineffective owing to inadequate resources and heavy reliance on government and corporate goodwill. These systems often fail to verify the true origin of minerals, allowing warlords to exploit them. In many cases, with the support of corrupt government officials, traced minerals are falsely attributed to validated but inactive mines, thus concealing their true origin in militia-controlled areas.
In essence, the global economy’s shortcomings in regulating the trade of conflict minerals allow warlords to profit while perpetuating violence and instability. By actively engaging in these illicit dynamics and failing to take action, public and private licit and legal actors, both at the national and international levels, are undermining efforts to address the pitfalls of critical minerals trade. This situation impedes steps to solve the wider climate crisis and perpetuates violence worldwide, all while undermining mineral-producer countries’ development and prosperity.
Environmental, Social, and Governance Factors Are Essential for Nickel Industries’ Long-Term Economic Benefits
Fabby Tumiwa, Executive Director, Institute for Essential Services Reform
Indonesia, with its 21 million tons of nickel reserves — 22% of the world’s total — is the world’s largest nickel producer. In 2022, the country produced 1.6 million metric tons of nickel, half of global production. Indonesia prioritizes nickel downstreaming — processing the ore into an end product — as it seeks to become a battery supply chain hub. But this policy has a dire impact in terms of environmental, social, and governance (ESG) factors. The Indonesian government and its foreign public and private partners must make strong policy decisions to address this challenge for the sake of human, environmental, and economic prosperity.
Since 2009, Indonesia has undertaken a series of measures to boost its mineral processing industry, from the adoption of the Coal and Mineral Law in 2009 and its strengthening in 2020 to successive bans of raw mineral export from 2014. These bans notably led the EU in 2019 to launch a dispute at the World Trade Organization (WTO), claiming that the restrictions unfairly limited nickel ore access for EU producers. The WTO ruled in favor of the plaintiff in 2022, and Indonesia appealed the decision. Nonetheless, the export ban has led to a sharp increase in Indonesian mineral processing foreign investment, reaching $53.3 billion in 2023, and to the proliferation of nickel processing smelters in the country, notably thanks to Chinese companies’ investments. Illustratively, Indonesia established an EV battery supply chain to respond to the demand for EVs.
However, to become a global battery supply chain hub, Indonesia requires high-grade nickel to produce class-1 nickel products critical to electrical vehicle batteries. This puts at risk Indonesia’s nickel ore reserves, which would be depleted within 10 years if the country were to increase its smelting capacity. Moreover, production methodologies used in Indonesia, such as high-pressure acid leaching, have a severe impact on the environment. They also require complex waste-disposal management technologies, which in turn demand higher investment costs from private investors. Additionally, refining nickel ore is energy-intensive, and most smelter owners use coal-fired power plants, which impedes the achievement of Indonesia’s Just Energy Transition Partnership emission targets. Indonesian class-1 nickel production emits two to six times more carbon dioxide than Class 2. Skarn Associates reports that each ton of metal produced leads to the emission of 58.6 tons of CO2, compared to 48 tons globally.
Amidst increasing concerns over the impact of the production of nickel for batteries on ESG factors, in March 2023, Indonesian President Joko Widodo visited Vale Indonesia’s mining and smelter operations and committed to improving nickel-mining environmental standards. He pledged that his government would, in the future, only approve new smelter permits if companies used renewable energy. Since this announcement, however, the government has not taken any significant steps to reduce nickel processing’s environmental impact — this move would notably raise investment costs and act as an entry barrier for foreign investors.
If Indonesia wants to become a major player in the global EV supply chain, to access US and EU markets and reduce its dependency on China, it is critical that its government addresses ESG concerns. On November 13, President Joko Widodo and U.S. President Joe Biden discussed how to improve the critical-mineral supply chain. This was an opportunity for the United States and Indonesia to promote transparency and sustainability in the global EV supply chain. Both leaders agreed to create a critical mineral action plan as part of critical mineral agreement negotiations.
The first step is asking miners and smelter companies to follow industry-recognized responsible mining standards. The government must also encourage all operating smelters to reduce their environmental impact, process tailings waste according to standards, and control land clearing for open pit mining. Communicating this new approach to all parties, including future investors will build understanding and support.
If the Indonesian government fails to improve ESG indicators, investment in mining extraction and processing will continue to impact the environment, deter human and development progress, create inequality, and ultimately cost much more than the direct economic benefits of these investments.
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