China's global dominance shows need for transparency in race to dig up critical minerals
New mapping of China’s global critical minerals sector shows need for greater transparency and accountability to safeguard the energy transition, say Transparency International.
The report Digging deeper: understanding the Chinese global mining sector identifies 81 Chinese mining companies involved in 180 critical minerals projects across the globe.
Since 2018, the value of China’s overseas investment in the metals sector is estimated at US$60 billion with large Chinese companies, including many including many state-owned enterprises (SOEs), having market dominance. This includes Tianqi Lithium producing 11% of the world’s lithium and CMOC Group producing 9% of the world’s cobalt.
As companies rush to mine cobalt, copper, lithium, nickel, and rare earths needed for renewable energy, the risks of corruption cast a shadow in countries with weak governance.
The risks are significant for countries with low governance scores, particularly those producing significant amounts of critical minerals where large numbers of Chinese companies operate, such as the DRC (cobalt), Indonesia (nickel) Zambia (copper), Zimbabwe (lithium), and Chile (lithium).
The research looks at the global Chinese mining sector focusing on four case studies identifying governance risks in key markets and gaps in the ESG frameworks and practices of Chinese mining companies with potential impacts for local communities, environment, and the energy transition.
Clancy Moore, CEO of Transparency International Australia said:
“China’s mining sector is vital to the clean energy revolution, but without strong governance, the energy transition could be stained by corruption. We can’t let the energy transition be another resource curse for people living in poverty.
“With changes to the Foreign Investment laws and the Future Made in Australia reforms, Australia must increase the transparency of who ultimately owns and benefits from our natural resources. Committing to the Extractive Industries Transparency Initiative is the first step.”
Dr Ana Carballo, head of Transparency International’s global mining programme said:
“The findings are not unique to Chinese companies; they reflect broader challenges in the global mining sector including in Australia where policy makers often turn their back on governance risks.
“For governments and Australian companies partnering with Chinese companies on critical minerals, it’s important to deepen their understanding of the sector and ensure robust ESG frameworks.”