Supply Chains & Social Changes Are Externalities That Are Affecting Acquisitions Of Critical Minerals

The world faces a growing demand for critical minerals to meet expanding demand for clean energy and low-carbon technologies and to fuel the transition to cleaner energy futures. As more of these green technologies are adopted, a rapidly growing demand for critical minerals may result in collateral damages particularly in local communities and ecosystems affected by extraction activities. The ocean depths are one such area of concern.

The deep seabed offers an abundance of fist-sized rocks speckled with nickel, cobalt, copper, and manganese. These are the critical minerals that EV manufacturers require. Obstacles to retrieve the rocks from the ocean depths with undersea robots have raised alarms, though, because government officials and scientists are voicing dismay over the ecological damage that may result from grazing across the sea floor.

EV minerals include graphite, cobalt, nickel, manganese, copper, lithium, aluminum, and rare earths. Given the current low recovery and recycling rate, most of the mineral supply will need to come from virgin materials. Efforts to systematically address the emerging sustainability issues associated with critical minerals have been challenged by complex mineral supply chains. There are growing concerns over the socio-environmental impacts of mineral extraction.

Right now, most automakers are hesitating to scour the ocean depths for critical minerals, even it it means bypassing one of the only places on earth where such an abundance exists.

As the authors of a review of critical minerals research for EVs note, practitioners and policymakers are now raising questions about how to systematically address the emerging issues associated with critical minerals. Science has an important role to play in providing a clear and consistent framework for governing their use.

Graphic provided under CC x 4.0/Agusdinata, et al

The telecoupling heuristic above goes beyond the consideration of primary, secondary, or even tertiary supply chain externalities of critical minerals resource use. It also highlights the channels through which institutional, economic, or social changes trigger transformations in distal ‘receiving’ locations, as well as how knowledge of such transformations is fed back to such ‘sending systems’ to potentially stimulate shifts in governance.

The critical minerals global trade and supply chain experiences influences from:

• the global mineral market and material flows for use in EVs and supply chain practices that support production of EVs
• sustainability and resource policy and governance
• mining corporate social responsibility
• information feedback and public discourse

The sustainability challenges of critical minerals are evident as a product of the concerns of the countries of the Global North that are both promoting policies in support of EV adoption and low-carbon energy transitions, as well as the sites of significant consumer demand for products made with these minerals. increasing attention is being paid in this thematic domain to concerns of community development and the potential for conflict in mining regions.

There is also increased interest in the local impacts of mining activities, the implications for human rights, and emerging attention to the role of mineral extraction in the pursuit of sustainable development goals.

Critical Minerals & the Conundrum of the Ocean Floor

The past decade saw a significant increase in the knowledge about biodiversity in the deep sea. Efforts are underway to describe the many species yet to be discovered and identified and to understand the structure and function of ecosystems in the deep ocean. Such knowledge underpins effective measures to protect the marine environment in the deep ocean.

The “Mining Code” refers to the whole comprehensive set of rules, regulations and procedures issued by International Seabed Association (ISA) to regulate prospecting, exploration, and exploitation of marine minerals in the international seabed Area or “the Area” (defined as the seabed and ocean floor and subsoil thereof beyond the limits of national jurisdiction). ISA is the organization through which States Parties to UNCLOS organize and control all mineral-resources-related activities in the Area for the benefit of humankind as a whole. In so doing, ISA has the mandate to ensure the effective protection of the marine environment from harmful effects that may arise from deep-seabed-related activities.

The main item on their March agenda was the draft regulations on the exploitation of mineral resources in the Area prepared by the Legal and Technical Commission (LTC). Closing the meeting, H.E. Mr. Juan Jose Gonzalez Mijares, President of the Council for the 28th session commented, “The progress made by the Council in drafting the regulations on future seabed activities and its global responsibility are the best guarantees for self-sustaining use of resources for the benefit of humanity with the highest standards for the protection of the marine environment.”

The ISA has been in turmoil since the small Pacific Island nation of Nauru invoked a clause tucked in the Law of the Sea that could allow mining within months, likely before the full environmental impact is known or regulations are put in place. At the March meeting of the seabed authority council, comprised of representatives from 36 countries, many delegates searched for a legal path to put an indefinite pause on seabed mining. It is unclear if any such “precautionary pause” is possible under the U.N. Convention of the Law of the Sea, which was modified in 1994 to give countries like Nauru a route to begin mining if the process of developing rules drags on too long. If permits are granted, it is unclear who would buy the nodules.

More than 700 marine scientists have signed a petition demanding a moratorium, which is also supported by 13 countries. French President Emmanuel Macron is calling for a permanent ban, saying a legal framework was needed to stop deep-sea mining from going ahead and urged countries to put their money on science to better understand and protect the world’s oceans.

Some car manufacturers, including BMW, Renault, Rivian, Volvo ,and VW publicly support a moratorium on seabed mining. GM, Ford and Daimler are, for now, keeping deep seabed materials out of their supply chain plans amid corporate concerns about environmental impact.