How will we supply our economy, lifestyle, and future with sufficient resources? This question is omnipresent in conferences, research, and policy making in Germany at a time when the government is preparing its new resource strategy. In this context, resource conflicts are frequently highlighted, both as a humanitarian disaster for mineral exporting countries and as a supply risk for importing countries.

Indeed, new approaches for dealing with resource conflicts have emerged recently. The OECD has just published draft due diligence guidance for responsible supply chains of minerals from conflict-affected and high-risk areas. The new U.S. Financial Reform Act even turned into law reporting of the origin of certain minerals.

Meanwhile, other analysts are focusing on the demand side of the resource-conflict nexus: increasing efficiency and recycling should slow raw material extraction. This improves environmental sustainability and potentially spoils the market for conflict minerals, but it may also ruin prices and foreign currency revenue for resource-exporting developing countries.

adelphi and the Wuppertal Institute for Climate, Environment and Energy researched these complex linkages between conflicts and resources (energy and mineral) over the past two years. They will shortly publish results in eight reports, including case studies and scenarios on rare earths in China as well as lithium in Bolivia. These minerals, in particular, highlight the need for assessment of unintended consequences of policy making, such as the effects of new energy policy – and the drive for renewables – on minerals supply and potential conflicts. The recommendations, therefore, include a 'risk radar’ for certain industry sectors and/or specific new technologies, combining data on mineral deposits and substitution options with data on the socio-political and conflict context of extraction and trade. (Moira Feil)

The research reports will be published shortly (in German) here.

You can find more information concerning the OECD due diligence in the mining and minerals sector here. The draft guidance can be downloaded here.

For a more detailed report on the US Financial Reform Act, please refer to the August edition of the ECC newsletter.

Published in: ECC-Newsletter, October 2010