NQOBILE XABA: Critical minerals boom presents opportunities and risks

SA is once again handily placed for the next big trend in the mining sector — that of critical minerals. This was at the centre of deliberations at the ninth platinum group metals round-table that the Mapungubwe Institute for Strategic Reflection (Mistra) hosted this week.

The International Energy Agency estimates that demand for the critical energy transition minerals required to enable a global transition will triple by 2030 and quadruple by 2040. In SA, critical minerals mining is essential for economic development and the transition to a low-carbon economy, but it also poses social and ecological challenges. The extraction of these minerals has severe environmental consequences such as carbon emissions from mining activities, destruction of biodiversity and land degradation. How then does a mineral-dependent economy such as SA navigate the environmental and social impacts of increased mining?

Recently, the importance of critical minerals (especially critical energy transition minerals) have received a lot of attention recently due to their importance in the global effort to curb the impact of climate change and achieve an energy transition. These minerals are also referred to as “critical raw minerals” by the EU and “critical energy transition minerals” by the UN secretary-general’s panel on critical energy transition minerals and various other bodies and institutions. Others also refer to them as “strategic minerals”.

Global demand for these minerals is growing rapidly as clean energy transitions will be mineral-intensive. For example, critical minerals are essential components in various clean energy technologies — from wind turbines, solar panels, batteries and electricity networks to electric vehicles. The strategic nature and geographical concentration of these minerals make supply vulnerable to economic, geopolitical, environmental and other risks. Access to these strategic minerals will thus become increasingly competitive. This places SA, with its endowment of critical minerals, in a good position to assert its desired role in the global energy transition, with all of the economic opportunities offered as well as the potential sustainability and environmental challenges.

SA is the leading global producer of platinum, manganese and chrome; ranked third in the production of vanadium; and seventh in the production of iron. Its mineral profile extends to base minerals such as nickel, cobalt, copper and others. These minerals find applications in batteries, auto catalysts, steel, electrolysers for hydrogen production and other purposes. The country has long recognised the need to benefit from its mineral endowments through industrialisation.

The National Development Plan (NDP) states that “SA must exploit its mineral resources to create employment and generate foreign exchange and tax revenue”. The NDP further emphasises the need for changes in mineral exploitation to ensure that the natural environment is protected. There are already concerns in SA about environmental degradation for industrial development. For example, civil society organisations have long raised concerns about the feasibility of the Musina-Makhado Special Economic Zone in Limpopo on this sensitive region and its vulnerable rural communities. The development is in one of the most biodiverse and water-scarce regions in SA. Communities in the province have long struggled with water scarcity challenges that are made worse by mining activities. The country thus needs to strike a balance between economic growth, environmental stewardship and social responsibility. 

The NDP and Africa Mining Vision also underline the importance of processing these minerals and playing an important role in the value chain. With regard to the hydrogen economy, for instance, SA has the potential to manufacture catalytic converters, fuel cells, electrolysers and related components, rather than simply providing raw materials for them.

The UN secretary-general's panel on critical energy transition minerals proposes seven voluntary guiding principles to guide the extraction of critical energy transition minerals to ensure equity and justice. The first and second principles state that “human rights must be at the core of all mineral value chains” and “the integrity of the planet, its environment and biodiversity must be safeguarded”.

As SA develops industries for mineral value chains, there should be continued efforts to minimise the environmental effects of these industries through responsible mining. Moreover, closer attention should be given to resolving the risks relating to biodiversity and water management: this should be achieved through increased research & development funding as well as skilled personnel capable of accelerating technological innovation. It is also imperative to continue efforts to rehabilitate land, combat air pollution, improve water management controls and engage with communities.

SA needs a more holistic view of development, which would aim to benefit from mineral endowments while also protecting the environment and providing benefits to workers, communities and society at large. There is a need to ensure that policies to meet developmental objectives consider both climate mitigation and adaptation, as well as transparent and participatory processes. Strategies should not be focused solely on the security of mineral supplies but should also incorporate the sustainable sourcing of minerals. Local contexts and socioeconomic imperatives should be embedded within any development strategies; this can be achieved by co-creating solutions with communities. Mistra’s ninth annual round table has brought to the fore the opportunities for SA in the critical minerals landscape and how the country can navigate the complexities of this landscape.

• Dr Xaba is a researcher at the Mapungubwe Institute and co-editor of the publication “A Just Transition to Low Carbon Futures in SA”.