Minerals needed to power the green transition from fossil fuels could become "the 21st-century version of the 'oil weapon,'" warns an internal study commissioned by Canada's Department of National Defence.
There is widespread agreement among scientists that drastic cuts in fossil fuel consumption are needed to stave off catastrophic climate change — and a transition to electric cars, wind and solar power form key pillars of this shift.
But as countries race to adopt more electric technologies, investors and governments are battling to control access to commodities like copper, lithium and rare earths from remote regions. This has led many observers to fear that the green transition could have echoes of the tension and violence characterizing the global pursuit of oil.
"The explosive growth of electronic devices in the past decade, coupled with fast-moving advances in green technologies such as wind power and electric vehicles, are driving the increase in demand for REEs [rare earth elements]," said the study produced for DND in 2020, and accessed under freedom of information legislation.
Soaring demand for minerals linked to the energy transition
"REEs are also crucial for national security as they are key ingredients in the production of a variety of defence-related components and applications," said the study. "Any disruption to the availability of rare earths could have serious economic and national security impacts around the world."
Rare earth elements are a group of 17 commodities with names like neodymium, cerium and yttrium. They're key components for advanced technologies, including hybrid vehicles, laser-guidance systems and flat-screen monitors.
Analysts said the general trend of competition for control also applies to other minerals needed for the energy transition, such as copper and lithium.
The paper said that China "has already shown that it is willing to use its rare earths as a political weapon," citing Beijing's 2010 move to halt REE shipments to Japan following the latter's detention of a Chinese fishing crew during a maritime border dispute.
China controls about 90 per cent of the world's supply of rare earth elements, said the study, which warned that clean technology minerals could be a "21st century version of the 'oil weapon' that Arab countries used during the 1973 OPEC embargo," when petroleum exports were halted to the U.S. in retaliation for Washington's support for Israel.
Nearly 100 pages of DND's internal files were withheld, underscoring the sensitivity of information surrounding access to these resources.
Minerals used in clean energy technologies compared to other power sources
The Department of National Defence declined an interview request. In emailed comments, a spokesperson said the study, conducted for DND by Canada's National Research Council, has not led to any direct actions from the military. It has, however, "informed broader departmental discussions that are ongoing."
DND is in talks with the U.S. over the countries' "shared defence industrial base," the spokesperson said.
To fuel the green transition, environmentalists fear demand for new mines, often in remote and ecologically sensitive areas, will lead to contamination as well as violence between communities and investors.
These local conflicts could rise in tandem with geopolitical strife between countries and corporations as power brokers jockey to control increasingly valuable resources everywhere from South American rainforests to Canada's Far North and the Democratic Republic of Congo.
"We are already seeing more conflicts at the local level," said Donald Kingsbury, an assistant professor of political science at the University of Toronto who studies mining in Latin America, of the renewable energy boom.
For example, he said tensions are rising in the so-called lithium triangle spanning the borders of Chile, Bolivia and Argentina, citing protests and strife between national and local governments over who should control resource revenues and decisions around new projects.
"It's a tension multiplier," Kingsbury said of new mineral demand linked to the energy transition. "We see it setting the stage for future conflicts down the road."
Demand for copper is expected to double by 2050, the CEO of the commodities trading giant Glencore predicted last year, meaning the world will need to extract 60 million tonnes annually.
Producing one electric car requires more than twice as much copper as a gas-powered vehicle, according to the Paris-based International Energy Agency (IEA). A clean-energy vehicle also needs minerals not used in traditional cars, including cobalt, lithium and graphite.
Minerals used in electric cars compared to conventional cars
Lithium demand is projected to spike more than 40-fold by 2040, according to the IEA, with demand for graphite, cobalt and nickel increasing more than 20-fold.
Getting to net zero emissions "requires a truly monumental global shift, a copper-intensive global system for renewable power," said Daniel Earle, CEO of Solaris Resources, a Canadian-listed mining company. "You are basically talking about an effort to electrify everything you can."
A scramble for Ecuador's untapped resources
Earle is hoping to capitalize on this new demand in an impoverished corner of southeastern Ecuador.
Solaris wants to build an open-pit copper mine on a 286-square-kilometre concession, extracting more than one billion tonnes of material near the border with Peru. If the Warintza project receives its environmental permits and meets other requirements, copper mining at the site could start as early as 2026, Earle said.
It's in places like this, a biodiverse region and hotbed of illegal mining accessible almost exclusively by helicopter, where the scramble for resources linked to the energy transition is heating up.
Earle said the biggest copper projects already operating, including Chile's giant Escondida mine, the world's largest, do not have the capacity to meet the new demand. He expects smaller operations in more remote regions, like the Solaris plan, to proliferate globally.
Long dependent on oil revenues and reticent about approving new mines, Ecuador's government is in the process of allowing more mineral extraction, said Nathan Monash, president of the country's Chamber of Mines.
"Ecuador almost has perfect timing bringing mineral resources on stream when the transition is happening," Monash said. The sector could be responsible for 500,000 direct and indirect jobs in Ecuador by the end of the decade if planned projects come online, Monash said.
He acknowledged that the increase in mining activity could replicate some of the "geopolitical issues" that have plagued the oil sector. But he insisted companies in Ecuador have a "commitment to local communities" after "learning a lot from extraction policies in the past."
"All neighbours can have disagreements, but fundamentally it comes down to trust," Monash said. "Is there trust built up between local stakeholders and mining companies?"
Federico Velásquez, Solaris's vice president of operations, stressed that Indigenous Shuar communities living around its proposed mine support the project, due to promises of jobs and infrastructure in one of Ecuador's poorest regions.
Other Indigenous groups in Ecuador, including the Governing Council of the Shuar Arutam People, which represents dozens of communities in the region, have called on the government to suspend the project.
"These activities [by Solaris] violate our legitimate decision to say 'No to Mining' in our territory, a decision protected by our right to self-determination and other collective rights," said Josefina Tunki, the group's president, in a statement last year.
Local environmentalists are also concerned about the new mines, fearing water contamination, forest destruction and long-term damage to remote ecosystems, said Nathalia Bonilla, president of the Quito-based conservation group Accion Ecologica.
The mining industry argues these projects are necessary for combating climate change, creating jobs and moving Ecuador beyond its dependence on oil extraction. If a firm like Solaris doesn't build the copper project, they say, someone else might.
"China is the dominant player in natural resources in Ecuador," said Solaris CEO Earle. Chinese companies are taking "100 per cent" of the copper concentrates from the Mirador mine located near the Warintza project, he said, and virtually all of Ecuador's oil production.
"Chinese mining companies have gotten the jump on Western mining companies."
China's embassy in Ecuador did not respond to interview requests.
In addition to its growing presence in South America, China continues to control the market for rare earths "and is the leader in rare earths research and development," said the study for DND, leading some analysts to believe Beijing could potentially block sales of the commodities during periods of strife.
There was a comparable situation in the oil market of the 1970s. During the 1973 Arab-Israeli War, Middle Eastern nations from the Organization of Petroleum Exporting Countries (OPEC) cartel imposed an embargo on oil sales to the U.S. as retaliation for Washington's support for Israel during the conflict.
The embargo led to a spike in oil prices and high inflation, launching an era of economic malaise in the West. From 1973 to 2013, between one-quarter and one half of interstate wars were connected to oil, according to research published in the journal International Security.
The situation is comparable to today's oil market, with prices at record levels due to Russia's war in Ukraine, persistent inflation and other factors.
A spokesperson for Natural Resources Canada said the government is working to "develop a comprehensive understanding of Canada's mineral needs over the medium to long term," with nearly $4 billion proposed in the latest budget for a critical minerals strategy to boost supplies.
To avoid replicating the mistakes of the oil era, the University of Toronto's Kingsbury said the shift to electrification should not mean a "Tesla in every garage." Improving emissions-free public transit and making cities walkable would do more to fight climate change than continuing to perpetuate the 1950s model of suburban sprawl, he said.
After an inevitable surge in extraction of new minerals for the transition, there should be a push for a more circular economy, Kingsbury said. This would allow, for example, lithium to be recycled from old batteries rather than constantly mined.
Nathalia Bonilla from Ecuador's Accion Ecologica agrees. She said the fight against climate change shouldn't involve countries and communities battling over resource deposits or wrecking rainforests with a plethora of new mines.
The green transition, she said, "should be about consuming less materials, not more."
Read the study commissioned by Canada's Department of National Defence:
The travel and reporting for this story were funded by a grant from the Global Reporting Centre and Social Sciences Humanities and Research Council.