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What does the energy transition mean for the mining sector?

Five trends to understand corruption risks in the extraction of transition minerals
Energy transition Corruption Resources industry Mining Regulation of lobbying Political influence Argentina Australia Madagascar Indonesia

As the world moves towards cleaner sources of energy, demand for minerals is growing exponentially. The mining sector has a critical role to ensure that the energy transition is sustainable and just. Low-carbon technologies in power generation and in transport require a higher level of mineral inputs than their fossil-fuel based versions.

Clean energy technologies require a variety of minerals, often referred to as ‘energy transition minerals’ or ‘critical minerals’ for their role in enabling an energy transition. Demand for these minerals will grow dramatically If the world is to meet its climate commitments, and limit global temperature rise to below 2°C, and even more so to meet the goal to stay below 1.5°C.

When the state is in charge of both regulation and extraction of a mineral commodity, conflicts of interest can make regulatory or monitoring frameworks more vulnerable. 

This report highlights a selection of key trends to understand corruption risks for the mining industry associated with the energy transition, organised around five key areas:

  1. High demand will lead to more mining licenses in jurisdictions with weak governance.
  2. The rapid growth of demand for these minerals could increase speculative behaviour.
  3. Fast-tracking of projects and strategic initiatives for the sector can increase government pressure and put new projects at risk.
  4. Increase of state participation in the extraction and processing value chain can heighten corruption risks.
  5. Investments in sensitive locations can exacerbate environmental, social and political tensions.
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