Not many people are aware of an obvious issue with the energy transition.

It is supported by limited resources, and the mining sector has already issued a warning that there won’t be enough metals to make all the batteries needed for the shift.
Prices in all commodity sectors are rising as a result of the shortage of supply.

Politicians have declared that the energy transition is the only path ahead for human civilization. Although not every nation on the earth supports it, those that do speak out the loudest. The shift still stands as a goal, even in the midst of the shortage of fossil fuels that is starting to impair economies. It goes without saying that the shift would require enormous amounts of metals and minerals to take place on the scale that its architects and most ardent supporters envision. The fact that the majority of these metals and minerals are already in short supply does not receive as much attention. The transition issues don’t even begin here.

Executives in the mining sector have been warning that there is not enough copper, lithium, cobalt, or nickel to make all the EV batteries that will be needed throughout the transition. Additionally, they have not been the only ones. However, the European Union recently took action to virtually restrict the sale of automobiles with internal combustion engines beginning in 2035.

According to a senior VP at MP Minerals, a rare-earth miner, “Rare earth elements are key building blocks and their applications are very extensive across modern life.” According to expected investments, “one third of the demand in 2035 is not projected to be satisfied.”

Prices in all commodity sectors are rising as a result of the shortage of supply. According to an estimate by Barron’s, several reasons, including Western sanctions against Russia, a major exporter of such metals to Europe, have caused the price of a basket of EV battery metals that the service monitors to increase by 50% over the past year.

The cost of the energy shift is increasing

Of fact, the cost of the energy shift is increasing beyond what was anticipated because of the shortage and rising costs. It has also served as a reminder to us all that the move is not toward a future powered by renewable energy because of these metals and minerals, which are just as finite as crude oil and natural gas. A future with less carbon is the direction. And some of the worst models from the past, which we desperately wish to leave behind, might be perpetuated in this future.

Many of the battery metals required for the energy shift are imported from Africa, a region plagued by political unrest, corruption, and extreme poverty. Additionally, because to the energy transition, it is a continent that is currently under threat from a new form of colonialism.

Cobus van Staden, a China-Africa researcher from the South African Institute of International Affairs, claimed in a recent analysis for Foreign Policy that the dirty secret of the green revolution is its insatiable appetite for resources from Africa and other regions that are produced using some of the dirtiest technologies in the world.

More significantly, van Staden continued, “What’s more, the accelerated shift to batteries now threatens to replicate one of the most destructive dynamics in global economic history: the systematic extraction of raw materials from the global south in a way that made developed countries unimaginably wealthy while leaving a trail of environmental degradation, human rights violations, and semipermanent underdevelopment all across developing countries.”

If you are familiar with the history of resource extraction in Africa, it is tough to contest this forecast. It has indeed been a prominent aspect of the colonial and post-colonial period, and is occasionally referred to as “the resource curse” and frequently utilized for oil. Van Staden says that nearly all foreign companies operating in Africa’s mining industry are engaged in human rights violations, corruption, and the maintenance of low labor and environmental standards.

This evidence suggests that the energy transition is not particularly socially conscious in addition to being non-renewable. In other words, the ESG investment movement, which concentrates on transitional companies, may actually favor businesses that are not particularly socially or ecologically conscious. Certainly not in Africa. Because the battery metals competition is entirely motivated by the need to achieve national riches at home rather than in Africa, there are no white hats, as Van Staden puts it.

One may argue that this time around, in contrast to the Industrial Revolution, we have far more institutions in place to safeguard human rights. As accurate as that may be, there hasn’t been much advancement on that, for instance, in the Democratic Republic of the Congo, a sizable nation that is crucial for the transition because to its wealth in cobalt.

Even with these tools, corruption cannot be eradicated unless everyone participating in it is opposed to doing so, which doesn’t seem to be the case with mining companies and resource-rich African governments. The issue with corruption is that it is challenging to eradicate. In turn, corruption has an impact on environmental regulations and worker compensation, and the resource curse maintains its hold on the continent.

The good news is that up until recently, all of these transitional issues were largely taboo. The more they are discussed now, the more likely it is that goals will be revised—or at the very least, deadlines will be altered—to make them more achievable. Perhaps, just perhaps, the just transition concept will gain traction as well.