Namibia cautioned against over-reliance on critical minerals
Global market not well established yet
Mines minister Tom Alweendo says Namibia should be careful not to overly rely on critical minerals to spur economic development.
Mines minister Tom Alweendo says Namibia must be careful not to place all its bets on critical minerals as no proper commodity market exists yet to determine pricing. He warned that such a strategy could impact economic development and growth.
Alweendo made these comments at a recent discussion on critical minerals hosted by the Economic Association of Namibia, noting that unlike traditional commodities, the demand for critical minerals lacks established price mechanisms.
“While we have noted an increase in the global demand for critical minerals, we are also aware that the global supply is faced with some risks. For example, the global market for some of the critical minerals is not as well established, unlike the traditional commodity markets such as gold or diamonds,” said Alweendo.
According to Alweendo, there is still much work to be done in terms of exploring for critical minerals to build up a knowledge base.
“It is not clear whether the current known deposits of critical minerals are nearly enough to satisfy the global demand or whether the known technology to extract these minerals is as efficient to satisfy the increasing global demand. As a ministry, we have started to address some of these issues and how they impact us,” he said.
New avenues
Alweendo also reiterated calls for a just energy transition, saying underdeveloped countries such as Namibia should not be unfairly forced not to use their non-renewable minerals to develop their economies.
“As we progress the energy transition, we are starting to realise that we will need what is now being referred to as critical minerals to support and sustain the energy transition. The trend towards greener and decarbonised value chains and the net-zero emission goal have triggered a global interest in the exploration, mining and processing of critical minerals,” Alweendo said.
There is a great need for countries such as Namibia and developed countries to have regular dialogue on how the world can move towards net neutrality.
“As the world is starting to figure out how to meet the demand for these critical minerals, we have realised the need for a globally coordinated effort to ensure the sustainability of the critical mineral supply chains. This calls for a dialogue and collaboration between resource-rich countries and resource-poor countries to ensure the orderly supply chains of critical minerals,” the minister emphasised.
According to the International Energy Agency, demand for rare earth elements is expected to reach three to seven times current levels by 2040; demand for other critical minerals such as lithium may multiply 40-fold.
Delivering on the 2016 Paris Agreement, under which signatory nations are obligated to reduce emissions to cap the global temperature increase, would require the global mineral supply to quadruple within the same time frame. At the current rate, supply is on track to merely double, as the MIT Technological Report noted.