Released August 12, 2024 | SUGAR LAND
en
Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--High-tech companies and the energy transition as a whole require increasing amounts of earth, rare and otherwise. Many of these earths/metals come from nations riddled with wars or other territorial conflicts, or from nations with poor records on human rights and/or--ironically--environmental concerns. In many African countries, militias fund their oppressive activities by selling minerals obtained through forced-labor mining operations.
Resources obtained from these nations are called "conflict minerals," and have been a source of concern for human rights and environmental groups for decades. The list includes the Democratic Republic of the Congo, the Republic of the Congo, the Central African Republic, South Sudan, Uganda, Rwanda, Burundi, Tanzania, Zambia and Angola.
A recent Statista report shows that the top five "big tech" companies, whom they refer to as "GAMAM", or Google, Amazon.com Incorporated (NASDAQ:AMZN) (Seattle, Washington), Meta Platforms Incorporated (NASDAQ:META) (Menlo Park, California), Apple Incorporated (NASDAQ:AAPL) (Cupertino, California, and Microsoft Corporation (NASDAQ:MSFT) (Redmond, Washington), cannot rule out the possibility of their suppliers using minerals from those nations.
Apple and Google's parent company Alphabet Incorporated (NASDAQ:GOOGL) (Mountain View, California) noted that smelters among their suppliers may have included minerals from six of the 10 African countries on the list; Meta lists five, and Microsoft has two. Statista adds that Alphabet has not updated its list since 2021.
CAHRAs, or Conflict-Affected and High-Risk Areas
Other areas of concern are what's called CAHRA, a list that includes Afghanistan, Mexico, Russia, Ukraine, Myanmar, India and Yemen.
These nations would seem to be in a different category of concern, at least for Microsoft, whose report stated that, while its suppliers using resources from those countries strive to operate responsibly, stopping operations there could cause economic harm to those nations. Ukraine, with conflict afflicted due to outside sources, likely would be at the top of that list.
The Dodd-Frank act of 2010 established the requirement for U.S. importers to disclose possible conflict minerals sources. In the European Union, similar requirements took effect in 2021. The purpose of both is to limit the financing of violent regimes and rebels worldwide.
Green Conflict Minerals
This category involves minerals needed for wind and solar equipment, the backbone of the green energy transition. Nickel, cobalt, lithium and others lead this segment, and demand for them is expected to explode between now and 2050.
According to the UN Environmental Program, by 2040 "the use of energy transition minerals will need to increase six-fold," which would push those minerals' market value to more than US$400 billion.
The fact that so many sources of these minerals are under the control of groups or nations identified as terrorists or repressive regimes creates its own green conflict, as buyers cope with the moral dilemma. Ligia Noronha, UN assistant secretary-general and head of UNEP, said, "Energy transition minerals can help usher in the clean energy age and opportunities for development. But the urgency and scale of demand could also lead to exploitation, human rights violations and environmental destruction."
Artisanal and Small-Scale Miners
Another issue is the miners themselves. In developed countries most mining is done by large companies. But in developing nations there is competition between larger companies and small family concerns, known as artisanal and small-scale miners (ASM). While these mines are small in size, their numbers are very large. In a 2020 report on the practices, the World Bank estimates that there are 44 million of them spread across 80 countries.
Larger companies, in many cases, have better safety procedures and more developed mining techniques, says the World Bank. Artisanal miners are more of a throwback to the gold rush days in America, where limited tools and nonexistent safety procedures endanger lives. "From landslides to mercury exposure to intense manual rock crushing, miners enter the work site most days under-protected," says the report.
Tracking exact numbers is difficult in this category, but the Bank report says gold, cobalt, and "the '3T's--tin, tantalum, and tungsten'--are among the sector's top offerings.
This is the conundrum, that the advance of technology and energy transition in the first world has led to opportunities both good and bad, in developing nations.
IIR's Geoffrey S. Lakings adds, "Where indeed is the balance in this industry, between providing resources for the world and benefitting the nations doing the mining? How do we help assure they're operating safely for the environment and their citizens?"
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
Resources obtained from these nations are called "conflict minerals," and have been a source of concern for human rights and environmental groups for decades. The list includes the Democratic Republic of the Congo, the Republic of the Congo, the Central African Republic, South Sudan, Uganda, Rwanda, Burundi, Tanzania, Zambia and Angola.
A recent Statista report shows that the top five "big tech" companies, whom they refer to as "GAMAM", or Google, Amazon.com Incorporated (NASDAQ:AMZN) (Seattle, Washington), Meta Platforms Incorporated (NASDAQ:META) (Menlo Park, California), Apple Incorporated (NASDAQ:AAPL) (Cupertino, California, and Microsoft Corporation (NASDAQ:MSFT) (Redmond, Washington), cannot rule out the possibility of their suppliers using minerals from those nations.
Apple and Google's parent company Alphabet Incorporated (NASDAQ:GOOGL) (Mountain View, California) noted that smelters among their suppliers may have included minerals from six of the 10 African countries on the list; Meta lists five, and Microsoft has two. Statista adds that Alphabet has not updated its list since 2021.
CAHRAs, or Conflict-Affected and High-Risk Areas
Other areas of concern are what's called CAHRA, a list that includes Afghanistan, Mexico, Russia, Ukraine, Myanmar, India and Yemen.
These nations would seem to be in a different category of concern, at least for Microsoft, whose report stated that, while its suppliers using resources from those countries strive to operate responsibly, stopping operations there could cause economic harm to those nations. Ukraine, with conflict afflicted due to outside sources, likely would be at the top of that list.
The Dodd-Frank act of 2010 established the requirement for U.S. importers to disclose possible conflict minerals sources. In the European Union, similar requirements took effect in 2021. The purpose of both is to limit the financing of violent regimes and rebels worldwide.
Green Conflict Minerals
This category involves minerals needed for wind and solar equipment, the backbone of the green energy transition. Nickel, cobalt, lithium and others lead this segment, and demand for them is expected to explode between now and 2050.
According to the UN Environmental Program, by 2040 "the use of energy transition minerals will need to increase six-fold," which would push those minerals' market value to more than US$400 billion.
The fact that so many sources of these minerals are under the control of groups or nations identified as terrorists or repressive regimes creates its own green conflict, as buyers cope with the moral dilemma. Ligia Noronha, UN assistant secretary-general and head of UNEP, said, "Energy transition minerals can help usher in the clean energy age and opportunities for development. But the urgency and scale of demand could also lead to exploitation, human rights violations and environmental destruction."
Artisanal and Small-Scale Miners
Another issue is the miners themselves. In developed countries most mining is done by large companies. But in developing nations there is competition between larger companies and small family concerns, known as artisanal and small-scale miners (ASM). While these mines are small in size, their numbers are very large. In a 2020 report on the practices, the World Bank estimates that there are 44 million of them spread across 80 countries.
Larger companies, in many cases, have better safety procedures and more developed mining techniques, says the World Bank. Artisanal miners are more of a throwback to the gold rush days in America, where limited tools and nonexistent safety procedures endanger lives. "From landslides to mercury exposure to intense manual rock crushing, miners enter the work site most days under-protected," says the report.
Tracking exact numbers is difficult in this category, but the Bank report says gold, cobalt, and "the '3T's--tin, tantalum, and tungsten'--are among the sector's top offerings.
This is the conundrum, that the advance of technology and energy transition in the first world has led to opportunities both good and bad, in developing nations.
IIR's Geoffrey S. Lakings adds, "Where indeed is the balance in this industry, between providing resources for the world and benefitting the nations doing the mining? How do we help assure they're operating safely for the environment and their citizens?"
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
