Clancy Moore I 21 September 2023
International Forum on Sustainable Mineral Supply Chains, Chengdu, China
I’d like to thank China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters (CCCMC) for the opportunity and acknowledge the leadership and vision of CCCMC.
I’d also like to acknowledge the participation of CCCMC enterprises, international partners and colleagues here today for sharing your experiences and interests.
As the CEO of Transparency International Australia, I lead Transparency International’s global mining programme working in over 20 countries around the world to promote transparent, accountable and inclusive governance of the mining sector which ensures that the social and environmental interests of current and future generations are protected.
This includes many countries where Chinese enterprises, and members of CCCMC, are active such as Indonesia, Australia, Argentina, Chile, South Africa, Zimbabwe.
I’m also very privileged to be a board member of the Extractive Industries Transparency Initiative – which is the global standard for mining, oil and gas sector governance – currently implemented in 56 countries globally.
Today I will talk about the some of governance challenges in critical minerals and importantly, the leadership opportunities that enterprises, including CCCMC members, can play to ensure responsible supply chains.
Ladies and gentleman, as the world races to a clean energy future powered by minerals like cobalt, lithium, nickel, rare earths, and copper it’s clear that China has a leadership role to play.
Since 2018, the value of China’s overseas investment in the metals sector has been estimated at USD 60 billion (or 16% of its total overseas investment).i Just over 75% of that investment has been in East Asia (predominantly Indonesia, and to a lesser extent the Philippines), South America (including Argentina, Bolivia, Chile and Peru) and sub-Sahara Africa (including Democratic Republic of the Congo (DRC) and Zimbabwe).
China holds 78% of the world’s cell manufacturing capacity for electric vehicle batteries, and hosts 75% of the world’s lithium-ion battery mega-factories, and produces most of the world’s mineral-rich components for battery cells.ii By 2025 it could control one-third of the world’s lithium resources.iii
Research by Transparency International Australia identified almost 80 Chinese mining companies involved in more than 175 critical minerals projects globally outside of China.
But these opportunities also bring significant governance risks across critical mineral supply chains and the mining value chain.
Many mining enterprises are operating in jurisdictions with weak governance and a significant percentage of the minerals needed for the energy transitions are located in countries with high risks of corruption.
For example, research shows that 70% of the world’s cobalt, 59% of Nickel, 34% of world’s lithium are located in countries with high corruption risks.
High demand for minerals, fast-tracking of projects, geo-political competition, and investments in sensitive ecological or conflict affected areas mean that these risks can also increase Environmental and Social risks for both companies, national governments and communities.
Importantly, enterprises can mitigate these risks by undertaking due-diligence, raising standards of business integrity and following international standards frameworks to identify and manage relevant risks.
In the spirit of cooperation and friendship, I have three opportunities to outline.
1. TI has developed a Responsible Mining Business Integrity Tool which is a self-assessment tool in Chinese and English that enterprises can use to assess their integrity practice against 40 international benchmarks and international standards. The RMBIT helps raise standard of integrity by:
The free tool has been used by 30 mining enterprises already including BHP and Rio Tinto to improve integrity standards and practices, mitigate the ESG risks, helps ESG reporting and can strengthen social license.
2. I’d also encourage CCCMC enterprises to continue to engage in the EITI in the 56 countries implementing the standard.
The EITI is a multi-stakeholder process and standard which promote win-win cooperation across civil society, enterprises and governments. The EITI helps build dialogue, trust, social license and ensure that communities, at the ultimate owner of a country’s resources share in the benefits of mining.
3. I’d like to invite all stakeholders to engage with TI chapters where you are working. We have over 100 offices around the world and more than 20 involved in our global mining programme.
So on behalf of Transparency International, I look forward to collaborating with you all today and helping build more transparent, responsible, and sustainable supply chains that benefit all of us.
ii Brookings Institute. China’s role in suppling critical minerals for the global energy transition https://www.brookings.edu/wp-content/uploads/2022/08/LTRC_ChinaSupplyChain.pdf
iii Bloomberg. China could control a third of the world’s lithium by 2025. https://www.bloomberg.com/news/articles/2023-03-13/china-could-control-a-third-of-the-world-s-lithium-by-2025#xj4y7vzkg