Sandeep Pai, Ian Barlow, Kanika Chawla and Chinmayi Shalya
There has never been a better opportunity for Global South countries to lead the energy transition agenda. With Indonesia, India, Brazil, and South Africa holding the G20 presidency in succession, Global South countries have a chance to reshape global energy transition in ways that bring equity and prosperity to developing countries far beyond the G20. The current energy transition presents an unprecedented $2 trillion opportunity for industrialization, growth, job creation, and prosperity.
Today, China dominates the deployment and manufacturing of new technologies, including solar PV modules, batteries and electric vehicles, which are essential for this energy transition. Meanwhile, the Global North has aggressively fostered innovation, deployed industrial policy tools, and formed alliances like the Minerals Security Partnership to diversify supply chains and scale clean energy technologies.
While the clean energy transition offers an opportunity for Global South countries, they must work together effectively to avoid being overshadowed by dominant global powers. Recently, the US declared a ban on the export of high-bandwidth memory chips (used in AI applications) to China. In retaliation, the Chinese government declared a ban on exports of key Rare Earth elements like gallium, germanium, and antimony to the US. This cycle of bans will have wider implications on pricing and raw material access beyond these countries. If Global South countries fail to unite in response to these geopolitical tensions, they risk losing out on critical opportunities. They must use forums like the G20 presidency to establish tangible collaboration amongst each other.
A critical area for cooperation is the development of value chains for transition minerals like lithium and nickel, essential for clean energy technologies such as batteries and permanent magnets. However, no single country can build out these value chains alone; a collective effort is necessary so that they become “price makers” rather than “price takers” in the global market. This requires key Global South producer and consumer countries to come together through platforms, such as the Council for Critical Minerals Development in the Global South to leverage their collective strengths. But the window of opportunity is shrinking fast. Here are five key areas where collaboration could foster the development of transition mineral value chains in Global South countries:
Global South countries should co-invest in all stages of the value chain – from mining and, processing to manufacturing. For instance, Indonesia and India could leverage their respective strengths: Indonesia’s vast nickel reserves and India’s strategic focus on mineral assets. Together, they could establish battery-grade refineries and manufacturing facilities in either country.
Indian state-owned companies are scouting for mineral assets globally, aiming not only to secure mines but also to invest in processing and refining facilities. Partnerships between countries with complementary infrastructure and supply-demand profiles could catalyse such investments, ensuring mutually beneficial outcomes.
The energy transition requires a skilled workforce, particularly for higher-tech materials and components like lithium hydroxide and refined rare earths. Time and again, Global South leaders have asserted the need for technical expertise in mining, mineral processing and beneficiation, and clean energy manufacturing. Expertise exists across some segments of the value chain in the Global South, but it is concentrated in the beginning (extraction) and end (assembly and installation) of these value chains.
High-skilled workforce is particularly scarce for higher-tech, transition-essential materials and components such as lithium hydroxide, refined rare earths, and wafers. Global South countries could jointly create a Centers for skill development skilling school of excellence to train workers in metallurgy, process engineering, and renewable energy equipment production, ensuring a skilled workforce for these value chains in the Global South.
Complex, and often contentious issues of intellectual property, environmental standards, and benefit sharing with local communities, require deep collective thinking, and a clear collective voice that doesn’t allow countries to be pitted against each other in a mineral rush. Global South countries could develop unified stances on critical mineral policies in global forums – like G20, the World Trade Organization (WTO), Conference of Parties to the UNFCCC – to address key issues like sustainable mining principles and how they must be applied universally to adhere to complex supply chain bottlenecks like border adjustment taxes.
Global South countries should collectively fund collaborative Research & Development efforts in areas such as innovative mining methods, alternate chemistries for clean tech components, and recycling. For example, key coal-producing countries like India, South Africa, and Indonesia could jointly invest in technologies to extract critical minerals (e.g. Lithium and Rare Earths) from sources like coal waste (e.g. acid mine drainage or fly ash). This approach could unlock new mineral reserves and reduce environmental impacts.
China and the United States have been investing in such technologies for nearly 20 years, and these technological alternatives are reaching commercialisation stages.
Global South countries can negotiate trade agreements – like the African Continental Free Trade Area – to reduce trade barriers, ensure profit-sharing, promote technology transfer, and create a regional baseline for extraction. For example, a coalition of India, Indonesia, Brazil, and South Africa could advocate for fair tariffs on mineral exports. They could also ask for improved market access for clean energy technologies in developed economies, something which the latter often pushes for.
Time is slipping away, and Global South countries need to move quickly to participate in the social, political, and economic correction opportunities offered by the rapidly growing demand for energy transition minerals. By pooling resources and coordinating efforts to develop critical mineral value chains, Global South nations can position themselves both as suppliers of raw materials and as leaders in clean energy manufacturing.
Collective efforts will not only create jobs and drive industrial growth but also bolster energy and economic security amidst a global scramble for minerals, energy, and prosperity.
Well-resourced countries are moving fast to compete, and Global South countries find themselves caught in the middle. By working together, the Global South can seize this once-in-a-generation moment to leverage its mineral wealth for shared prosperity.
