COP31: Critical Mineral-Rich Nations Seek A Bigger Stake In The Clean Energy Economy

For critical mineral supply chains, the question is no longer just about where the resources are found, but who processes them into materials that industry can use.

Critical minerals, such as lithium, cobalt, nickel, graphite and rare earths, are embedded in the technologies and infrastructure that increasingly shape everyday life, from solar panels and batteries to electric vehicles. 

As countries race to build new-age industries, control over the minerals, processing capabilities and underpinning technologies are becoming a source of economic and geopolitical power. Many of these resources are found across Africa, Latin America, Central Asia and Southeast Asia. BRICS+ countries and their partners hold substantial reserves of several critical minerals, including rare earths and manganese. Yet supply chains remain highly concentrated, particularly in processing and refining, where China plays a dominant role.

This concentration gives countries that control key processing technologies considerable leverage over those further down the supply chain, potentially limiting their ability to manufacture clean energy technologies.

The stakes are rising as demand grows. The global critical minerals trade was valued at $2.5 trillion in 2023, while demand for several minerals is expected to quadruple over the coming decades. For many resource-rich countries, the challenge is to capture more of the value created by the energy transition. Exporting raw materials alone will not deliver the jobs, technology or industrial capacity that come with processing and manufacturing.

The BRICS summit in New Delhi helped build momentum behind a commitment to a “just, fair and diversified” critical minerals supply chain. The next step is to turn that commitment into industrial projects, with a focus on local processing, technology transfer and a greater share of the benefits for producing countries. Countries will also need to negotiate collectively to secure better terms for investment and avoid replacing one form of dependence with another.

“Don't swap one commodity dependence for another,” said Shimukunku Manchishi, researcher and analyst at the Africa Futures Policy Hub (AFPH) at a recent webinar organised by Delhi-based Climate Trends. “The question we must ask is critical for who? The risk is you move from exporting one set of minerals to another.”

There are obstacles to bringing this debate into climate negotiations. At COP30 in Brazil, the African Group proposed including critical minerals and value addition in the final text, but the proposal was not agreed upon. China opposed discussing the issue within the COP process, a setback for countries seeking to make local value addition part of the global climate agenda.

At COP31 in Türkiye this year, critical minerals may again struggle to gain space on the formal agenda, even as countries debate how to accelerate the energy transition. With Ethiopia set to host COP32, the issue could return to the fore.

Experts from Africa, Latin America and India pointed to a wider question for the global energy transition: will countries supplying the raw materials also benefit from the industries being built around them?

Why mining alone is not enough

Many mineral-rich countries export raw materials but have limited control over what happens after those materials leave their borders.

Manchishi warned that the shift towards clean energy could reproduce this pattern if governments focus on supplying minerals without building other parts of their economies.“Policy makers should think about resilient development and economic diversification,” he said.

For countries in Africa and Latin America, that means looking beyond the immediate returns from mining. Processing minerals locally could create jobs and help develop technical expertise. Over time, it could also support industries that make components and finished products.

But building these industries requires more than access to mineral deposits. Processing plants need investment, technology, skilled workers and reliable electricity. Countries also need businesses that can use the processed materials and compete in global markets.

Meheli Roy Choudhury, a researcher at Chintan Research Foundation, said exploration was becoming easier, but access to processing technology remained uneven.

She proposed a dedicated BRICS Critical Minerals Fund to help finance processing infrastructure. Such a fund could help countries move beyond mining and develop more of the industries that use their resources.

Where these plants are built matters too. Roy Choudhury argued that processing facilities should be located in regions with abundant clean energy to reduce the carbon footprint of mineral production.

The economic case for local processing is clear, but the gains are not automatically visible. Governments need to ensure that the investment creates jobs, supports local suppliers and helps build skills that remain in the country. Otherwise, a new processing plant may add some domestic activity without doing much to change the wider economic relationship between the producer and the buyer.

Experts said that governments could also use industrial policies, including export taxes or restrictions where appropriate, to encourage local processing. 

Can countries reduce their dependence on China?

China's dominance in critical mineral processing makes this a difficult task. It has built substantial industrial capacity and expertise across the supply chain, including the production of materials used in batteries.

For countries seeking alternatives, finding new sources of minerals is only part of the problem. They also need the technology and manufacturing capacity to process those minerals and turn them into products.

At the BRICS summit, Indian Prime Minister Narendra Modi warned about the “weaponisation of technology and critical minerals”, reflecting concerns about the risks of relying on concentrated supply chains.

But cutting China out altogether is unlikely to be a practical solution, experts said.

“We will definitely not throw away China, because that's not possible,” Manchishi said. “There's obviously a geopolitical battle which is beyond us. We have to be smart about it and see where China can fit into our industry, our processing goals, and so on.”

His argument is that countries need to decide how to work with China while building their own capacity, rather than assume they can quickly replace Chinese technology and investment.

Luisa Bianchet, an analyst with Brazil's E+ Energy Transition Institute, also argued against excluding China.

China has technologies for processing battery materials and manufacturing components, and its companies invest in other countries. For emerging economies trying to build their own industries, access to that expertise can be important.

Bianchet said countries should negotiate as a group and seek partnerships that bring lasting benefits to local economies. These could include joint ventures with domestic companies, training for local workers, support for local suppliers and investment in research and development.

The terms of investment matter. A plant built with foreign technology may increase domestic production, but that does not necessarily mean local companies will learn how to develop or improve the technology themselves.

A "middle path" involves using Chinese technology under license in plants with local equity, mandatory local hiring targets, and time-bound technology transfer agreements, according to experts. To make technology transfer effective, states must invest in skilled labor, local suppliers, and research institutions to avoid simply importing technology without building national capability.

India's challenge goes beyond electric vehicles

India wants to expand its electric vehicle industry and reduce its dependence on imported critical minerals and technologies. But building more vehicles will not, by itself, make the country less dependent on other countries.

India could potentially connect its manufacturing base with mineral resources in Africa and growing electric vehicle markets in Latin America. To make the most of that opportunity, however, it will need to develop more of its own technology.

Sumati Kohli, a researcher at the International Council on Clean Transportation (ICCT), said India had made progress in deploying electric vehicles but had not paid enough attention to developing homegrown technology.

She said if India does not innovate and bring new technologies into the ecosystem, we are going to continue to be dependent on other countries which are already controlling the value chain. 

She argued for turning domestic innovations into products that companies can actually use.

India's experience highlights a wider challenge for emerging economies: access to minerals and a large domestic market can create opportunities, but countries still need the skills, technology and industrial capacity to turn those advantages into lasting economic gains.

Will COP31 address the problem?

Critical minerals play a key role in climate action. The transition away from fossil fuels will require more minerals for batteries, electric vehicles and other clean energy technologies. But there is no dedicated negotiating track for critical minerals under the UN climate process.

Instead, this debate has popped up in national policies, trade arrangements and voluntary initiatives. For mineral-producing countries, the challenge is to make sure that the push for more supplies also addresses the economic benefits and costs of producing them.

Bianchet said the African Group had proposed including a paragraph on critical minerals and local value addition during negotiations on the just transition at COP30, but the language was not included in the final text. “It happened mainly because China didn't want to talk about that in the COP ecosystem,” she said.

Bianchet expects COP31 to focus more on electrification and the transition away from fossil fuels than on critical minerals. She sees greater scope for the issue to gain attention at COP32.

One possible route would be to link countries' critical mineral policies to their national climate plans, known as nationally determined contributions, or NDCs. But it would require governments to agree on what they are committing to and how progress would be measured.

For now, the more immediate task is to turn calls for fairer supply chains into practical arrangements. That means financing processing plants, negotiating technology transfer, training workers and creating opportunities for local businesses.

BRICS could give emerging economies a platform to coordinate their approach to investment and industrial development. Climate negotiations could provide another forum to discuss how mineral supply chains fit into a just transition. 

Neither, however, can substitute for the policies and investments needed to build domestic industries.

[Edit: Bhasker Tripathi, Shaswata Kundu Chaudhuri; Production: Arkatapa Basu]