Critical minerals: Global demand should harness new wealth - WTO Briefing | United Nations

[00:00:05]Mercalance Madame President Security, Mr. Secretary General, Excellencies, ladies and gentlemen, uh my sincere thanks to DRC and President Chichedi for his invitation to come and brief the security council. and for convening this important high level debate and to other security council members who have brought this topic to the UN's attention in the past. I also want to thank the secretary general for his leadership on the critical minerals issue and for his insightful briefing.

[00:00:47]It's an honor to be back here. The last time was I was here was in 2009 when as managing director of the World Bank I addressed the UN Security Council on peace buildingilding issues. A mandate that feels especially relevant today because good natural resource governance is peace building by another name.

[00:01:07]Excellencies, ladies and gentlemen, we stand at an inflection point. We meet at a moment when multilateralism is weakened and under unprecedented strain.

[00:01:18]Strategic rivalries are intensifying, conflicts are escalating, communities are hurting. Trade has become a battleground for geopolitical tensions, and global trade is experiencing the worst disruption it has seen in 80 years. I often say we are going through a global stress test, and it's one we cannot fail. The world needs global cooperation and multilateralism more than ever. But it must be a reformed multilateralism, a modernized, more flexible and faster moving multilateralism that innovates in the face of fastchanging technologies.

[00:01:55]But today I want to what I want to emphasize is that within these disruptions we see opportunities.

[00:02:02]Surging global demand for critical minerals should represent a once- in a generation chance for Africa and other resourcerich developing geographies to harness new wealth to accelerate industrial development and to lift the living standards of millions. These opportunities should become the foundation for peace and prosperity, not conflict and poverty.

[00:02:26]But history also demonstrates how a resource blessing can all too easily become a resource curse. Weakening government accountability, encouraging corruption, triggering violence, sustaining conflict, and deepening insecurity and poverty. A variety of initiatives put in place by the UN, by civil society, by affected countries and international community have helped, including the Kimberly process and the extractive industries transparency initiative. But they've not been sufficient to make natural resources a force for peace. And now geopolitics threatens to globalize what used to be mainly domestic problems with security implications for the wider international community. Critical minerals are increasingly viewed as strategic assets, not just commodities and the major source of interstate competition. As major economies race to secure exclusive resource supply arrangements and deploy market access as leverage, there's a real risk that conflicts will rise, that resource capture will take priority over broader economic, developmental, and environmental goals, and that developing economies will find themselves locked even more into the lowest value segments of production whilst the highest value jobs, technologies, and profits go elsewhere. My message today is simple.

[00:03:46]Mineral wealth is not inherently a blessing or a curse. It's a powerful catalyst of incentives for governments, firms, local communities, and foreign powers alike. Whether these incentives lead to prosperity or conflict, to effective states or failed ones, to global cooperation or geopolitical fragmentation depends on the domestic and international policies and institutions that shape them. Our task is to change the incentives. We need to fundamentally change the way that resourcerich developing countries generate growth and share wealth. We need to see mineral wealth not just as a resource to be extracted and shipped abroad, but as a catalyst for economic transformation.

[00:04:29]Despite this difficult moment for multilateralism, there is a real opportunity to advance socioeconomic development, build resilience and stability, and create a more diversified, inclusive, and win-win global economy. Let me suggest three priorities.

[00:04:47]First, move from rent extraction and dependency to value creation.

[00:04:52]Resourcerich states are fundamentally right to demand more local processing, refining, and value addition. This is not just about capturing a larger share of the economic pie. It's about shifting society's incentives. When an economy depends on an in on integrated production, modern infrastructure, and a skilled workforce, governments are more accountable and have structural incentives to strengthen the rule of law, invest in education and training, and improve roads, electricity, grids, and digital networks. When production is rooted in value addition with local processing, manufacturing and local suppliers, it is easier for all stakeholders, governments, private sector, local communities and interested external governments on the demand side to keep track of the exploitation and movement of mind critical minerals. It is also easier for governments to tax and regulate it and harder for paramilitary groups to extract and capture. When resource mining benefits the whole community, not just mine owners, the community as a whole has a stake in its success, they will work to safeguard this success and act against those seeking to undermine it. In other words, moving up the ladder to a value added economy helps ensure that growth and wealth are shared by the many and not captured by a few. It's not just an imperative for development and socioeconomic inclusion. It's a peaceuilding imperative and global trade resilience is enhanced when communities that have been on the margins of the multilateral trading system can be further integrated into global trade through value addition that also decentralizes and diversifies supply chains. Countries and communities benefit through a greater share of global trade while the international community benefits through greater resilience arising from the decentralization of supply chains. At the World Trade Or organization, we call this phenomenon regalization, a movement that can better prosper and protect the world. For decades now, Africa's share of global trade has remained below 3%. Because of Africa's trade is still 60% commodities. Focusing on value addition of critical minerals will increase the continent share of global trade whilst enhancing peace, providing jobs and building prosperity.

[00:07:18]And Africa has the clean energy potential to make this work in a sustainable and climate friendly manner.

[00:07:25]The world needs to tap into the solar, geothermal, hydro wind and other renewable energy resources on the continent to deliver a win-win for critical minerals value addition.

[00:07:37]Second, strengthen the international rule of law, not the rule of power.

[00:07:42]Multilateral cooperation checks power imbalances, helping to turn competition over critical minerals from a zero sum contest for leverage into a positive sum opportunity for investment and value creation and shared prosperity. An open rules-based global economy can help resourcerich developing countries move up the value chain, providing diversified markets, access to investment and technology, and a strong foundation for building bilateral relations. Good multilateralism supports higher quality bilateralism.

[00:08:17]Fragmentation does the opposite. It magnifies far imbalances and encourages exploitation, coercion, and the weaponization of critical minerals. This is where the World Trade Organization can play a key role. Rules on transparency and non-discrimination reduce the opportunity and incentive to use economic power to extract preferential treatment or pressure smaller producer countries into arrangements that trade into exclusive arrangements that trade for long-term value uh is uh does not capture uh rather than focus on short-term gain. At the same time, World Trade Organization rules preserve policy space for legitimate industrial development, including local processing and value addition. But these rules are not perfect, just as multilateralism is not perfect. They need to be reformed, strengthened, and updated. But all countries and especially smaller and weaker ones are better off in a system that rewards cooperation under shared rules that one than one that rewards unchecked power. Third and most importantly, producer countries must exercise agency and ask what do I have to do to become a better partner to those who seek to cooperate with me and what do I have to do to become more self-reliant?

[00:09:43]Producer countries cannot depend on external actors to police supply chains or encourage local value added production. Major economies act in their own interest and have every incentive to put their own energy, industrial and national security interests first to carve out preferential deals and to keep suppliers locked in the business of raw extraction. But this dynamic can be changed into win-win outcomes. Africa and other resourcerich developing geographies have leverage of their own.

[00:10:14]The world cannot achieve energy security, the green transition or digital transformation without them.

[00:10:21]Africa alone has roughly 30% of the world crit world's critical minerals and less than half of its mineral reserves have been explored. The DRC accounts over 70% of global cobalt production.

[00:10:35]South Africa holds the world's largest reserves of platinum and manganesees and Zambia and the DRC are major copper producers. 10 to 12 African countries have commercially exploitable reserves of lithium and 15 to 20 commercially exploitable deposits of rare earths. To turn leverage into power, producer countries must work together. The G20 critical minerals framework agreed last year under South Africa's residency outlined some key objectives.

[00:11:05]Establishing subreional processing hubs and value chains. Strengthening crossber infrastructure and payment systems.

[00:11:13]Enforcing strong environmental and social standards and actively diversifying global trade links and markets. This is also why for African countries fully implementing the African continental free trade area is vital. It would expand regional markets, establish common standards, and increase the continent's market power. Afreexim Bank's recent Africa trade report shows how building regional battery and EV supply chains in mineralrich countries like DRC, Zambia, and Zimbabwe could help reverse the continent's pattern of exporting raw materials and importing finished goods. Cooperation is also key to attracting needed investment.

[00:11:56]engaging the world on producer count's own terms, not depending on any single actor. The WTO's investment facilitation for development agreement backed by 131 of our 166 members, most of them developing countries, is exactly the kind of d-risking tool Africa and other regions need to channel investment into value added production. value added production, rules-based trade, and African-led industrial cooperation will help help ensure that critical minerals move through legitimate channels rather than armed ones. I'm pleased to see that several African countries and leaders are moving in this direction, working with multilateral finance in organizations and other external partners. the DRC Zambia Angola's Loito Corridor project in partnership with the EU, the U, the USA, Italy, African Development Bank, the World Bank Group and the European Investment Bank as well as the African Finance Corporation shows progress. The corridor must become the prime example for sub regional value added minerals processing and manufacturing, not extraction and shipping of minerals. Morocco's EV batteries value chain and other efforts underway in Moritania, Namibia, Nigeria to create critical minerals from renewable energy value chains shows promise. Building out value chains takes time, but to build peace, we have no time to lose, so present efforts must be accelerated.

[00:13:33]In the meantime, we need this council to continue helping choke off the legitimate channels for critical minerals for the critical minerals trade by sustaining support for regional due diligence and traceability mechanisms, consistently enforcing existing sanctions regimes against armed groups groups profiting from smuggled minerals and providing political backing for regional cooperation frameworks. As the secretary general said, one additional idea worth exploring, a reciprocal critical minerals market information system modeled on the G20's agricultural market information system built incrementally and paired with real commitments on benefit sharing. This is not only work for this council. The UN system, regional organizations, international financial institutions, the private sector and civil society groups all have roles to play. The WTO's own trade policy review mechanism could help keep this traceability and enforcement efforts in the global spotlight. Economic policy and security policy must reinforce each other here or neither will hold.

[00:14:45]The this very council backed Southern African nations once before when they built the Kimberly process to stop the trade in blood diamonds. Today's opportunity is the same to build a firewall against geopolitical exploitation.

[00:15:00]The minerals beneath Africa or any developing region soil should never help to finance the conflicts above it.

[00:15:09]Resource C is not destiny. Incentives can be rewritten. Extraction or transformation, secrecy or transparency, fragmentation or rules-based cooperation. Our choices, your choices will matter. The biggest choices are for resourcerich countries themselves.

[00:15:26]Agency like charity begins at home.

[00:15:29]Today's geopolitical competition presents a challenge, but also an enormous opportunity. As the DLC presidency has rightly framed it, this is our chance to replace the vicious circle of the resource curse with the virtuous circle of the resource blessing. I hope we can seize it. Thank you for your attention.

[00:16:00]International.