Exponential increase in demand for transition minerals: risk and opportunity
Never has extractive industry transparency been more critical than in shaping the energy transition, as resource rich countries will face an exponential increase in demand which will lead to wealth generation. This presents both huge risk and opportunity.
This was the BHP Foundation’s key message at 2023 EITI (Extractive Industries Transparency Initiative) Global Conference held in Dakar, Senegal, last June.
The conference brought together representatives from EITI’s 57 implementing governments, 672 supporting companies and many civil society groups to collaborate on ways to ensure the estimated US$1.7 trillion of new mining investment over the next decade transforms the lives of the 1 billion people currently living in poverty in resource rich countries.
Speaking at the conference, BHP Foundation CEO James Ensor highlighted the risk that lack of transparency and accountability could create the environment for corruption to flourish, denying citizens the benefits which should flow from the extraction of their natural resources.
“Hiding the identity of the owners of companies securing exploration and mining licences is one of the largest corruption risks we face – and is the ‘getaway car of choice’ for those with corrupt intent seeking to misappropriate resource wealth for their personal benefit,” said James.
The opportunity relies on translating this vast mineral wealth into improved life prospects for citizens of resource rich countries – and in particular the 1 billion people currently living in poverty in those nations.
“The people of Africa currently lose US$122 billion in illicit capital flight every year, half of which relates to mining, oil and gas transactions where complex webs of companies with anonymous ownership are used to hide corrupt deals. Imagine the improvement to the lives of millions of people in resource rich countries if this money was rightly channelled into health, education, infrastructure and other essential services,” said James.
At the conference James outlined the BHP Foundation’s five- year partnership with the Extractive Industries Transparency Initiative (EITI) and Open Ownership to jointly implement the Opening Extractives programme.
The programme aims to transform the availability and use of beneficial ownership information for effective governance in the extractive sector. The programme combines political and technical engagement with participating countries to implement reforms on beneficial ownership disclosure in the extractive sector. Through the programme, governments, civil society and companies are improving natural resource governance.
Opening Extractives currently works with 11 governments including Ghana, Mongolia, Nigeria, the Philippines and Zambia, and is playing an increasingly critical role in laying the foundations of a just energy transition.
With EITI implementing governments now disclosing information including the Beneficial Owners of companies, tax and royalty flows and contracts, citizens will have access to information to demand accountability of both governments and industry to translate their natural resource wealth into positive change in their health, education, access to infrastructure and living standards.
Opening Extractives is supported by the BHP Foundation Natural Resource Governance Program, which works across the natural resource value chain to enhance governance, reduce corruption and enable people to have agency and voice in decisions affecting them. Learn more.