The global energy transition away from fossil fuels hinges on the production of technologies such as wind turbines, solar panels, batteries and more, all of which require minerals, such as lithium, copper and cobalt. But these are often located in fragile areas of high biodiversity, or close to communities that rely on local ecosystems for their livelihoods – contexts with which Latin American countries are all too familiar.
A recent publication by the Natural Resource Governance Institute (NGRI), a civil society organisation focused on improving countries’ governance to promote sustainable and inclusive development, pointed out that globally, nearly 40% of these mineral resources are found in “countries that exhibit weak or failing governance, which means they lack the laws, policies, practices and accountability mechanisms to ensure that mining does no harm and instead delivers benefits to their populations”. Poor governance has also been highlighted as a challenge by the United Nations’ Panel on Critical Energy Transition Minerals.
Such concerns were also prevalent at the UN COP16 biodiversity conference held in Cali, Colombia last October, where the host government, led by its environment minister Susana Muhamad, launched a proposal for a global agreement on traceability in mineral supply chains. This calls for global commitments to establish systems for traceability and transparency that can help to reduce biodiversity loss and pollution resulting from the extraction and trade of such minerals. The proposal also targets a binding global treaty at this year’s COP30 climate summit in Belém, Brazil.
A few months later, Dialogue Earth spoke with Juan Luis Dammert, NGRI’s director for Latin America, who worked on the development of the proposal launched in Cali, to hear more on the agreement’s goals and progress. The interview has been lightly edited for length and clarity.
Dialogue Earth: What exactly is the agreement that is being promoted?
Juan Luis Dammert: This agreement has arisen from the need to have due diligence and traceability mechanisms for mining, especially in cases where mining products come from chains that may be linked to illegal activities. That was the original motivation of the Colombian Ministry of Environment, which has designed this initiative, with hopes to arrive at COP30 in Belém with a consolidated version that can be taken on board by countries.
What are the next steps for now?
A multi-stakeholder working group will be created under the umbrella of the UN to take this initiative forward. There is a diplomatic path and public policy work that is opening up, which will have to take shape for the presentation of the agreement at the great moment of confluence that is COP30 in Belém.
This is a race, where gold and other minerals will also continue to be extracted
What challenges lie ahead?
The main one – and I don’t quite understand how it is going to happen – is how other minerals, not only transition minerals, will be included. For example, the problem in the central Amazon is that of gold. The spirit of the [UN] transition panel is about mining as a whole. The world requires more and more minerals, and we are entering a stage of intensification in the rates of extraction, which we must watch closely. This is a race, where gold and other minerals will also continue to be extracted. That is why we need to develop this working group that can take a global view.
Do you see this broader inclusion of minerals, such as gold, as possible?
I would think so, because in this discussion, we are also talking about biodiversity. And for countries like Peru and Colombia, the central focus is gold and its impact on regions like the Amazon, which is highly biodiverse – so we have to look at that angle as well. The other big issues are human rights and the consultation rights of Indigenous peoples, so that they are not relegated in the extraction processes.
With this agreement, a big agenda has been opened up in which there are several issues. It is not just a treaty for the sake of it; it is a treaty to overcome the problems generated by mining at all levels. We also have to see how countries and markets can guarantee traceability, which we know is not happening now.
Can business also be involved in this agreement, or is it only at the government level?
I think that when you talk about a multi-stakeholder group, companies definitely have to be involved. Companies have to play a very important role, especially international traders and buyers. And if we talk about gold, for example, countries like Switzerland, the United States, Canada, the United Arab Emirates and India, which are among the main buyers, must be more active.
In Latin America, which are the most critical regions with respect to the extraction of minerals?
With minerals in general, there is a varied and complex picture. We must also not lose sight of the minerals that will be disadvantaged by the energy transition. For example, northern Colombia is one of the main coal-producing areas, and there have been announcements of government rollbacks [in this sector]. But at the same time, some are betting on continuing this extraction, and there are economies that continue to use coal, such as China.
However, the situation of lithium, for example, which is seen as important in the energy transition, is different. Latin America plays a key role here: Chile is the second largest producer in the world; Argentina has increased its production and is emerging as a very important player; Bolivia is trying to develop its industry without much success yet; Peru has some exploration projects that have created a lot of expectation in the government, and Mexico is also trying to become strong. So there is a lot of expectation for all minerals in Latin America – but also a lot of pressure. We have to look at the whole picture.
Is there any other mineral in particular that you think we should be keeping a close eye on?
Copper – in any technological scenario, interest in it remains high. So what we expect now is a long cycle of strong demand for copper, which Chile, Peru, Colombia and Mexico will have to prepare for as best they can.
And if we don’t prepare, how might things end up?
In the coming years, we will see an intensification in extraction rates and this requires countries to better prepare or strengthen their governance frameworks. Otherwise, we are going to see repetition of the problems of the past at a large scale, with corruption, illegality and destruction. There is no magic solution to our problems, but there are steps like this agreement, through which we must avoid more conflict or injustice being generated by increasing mineral extraction.
