The geopolitics of critical minerals with Minefield Consulting

Once a somewhat niche industry, critical minerals are now dominating headlines, influencing geopolitical trends and driving international trade. 

These materials are core components of technologies crucial to the energy transition and defence systems, and heightened interest in these areas is fuelling demand. For example, lithium demand jumped by 30% in 2024, while nickel, cobalt, graphite and rare earths all increased by 6-8% – and it is expected to keep climbing. 

With the International Energy Agency forecasting demand for these minerals to triple or even quadruple by 2040, the rush for critical minerals will continue shaping international relations, highlighting the need to address major environmental and social implications. 

In this week's episode, Giulia interviews Olimpia Pilch, critical minerals consultant at Minefield Consulting, on the complex world of critical minerals, their importance in energy transition and defence, and the geopolitical and environmental challenges involved. 

Their wide-ranging conversation covers:

• The definition of critical minerals
• Supply chain vulnerabilities and geopolitical risks
• China's role in critical mineral processing and supply
• What are the potential and limitations of critical mineral recycling
• The environmental and social implications of mineral extraction

While the Global North has outsourced polluting industries, including mining, for decades, it’s crucial to understand that clean technologies need these primary sources. Amid geopolitical tensions straining supply chains, achieving the energy transition may require a new world order.

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Transcript

Giulia Bottaro (00:36)
Hello and welcome to a new episode of Shaken Not Burned and I am your host Giulia Bottaro. Once a somewhat niche industry, critical minerals are now dominating headlines influencing geopolitical trends and driving international trade. These materials are core components of technologies crucial to the energy transition and defense systems. Heightened interest in these areas is fueling demand. For example,

Lithium demand jumped by 30 % in 2024, while nickel, cobalt, graphite and rare earths all increased by 6 to 8%, and this is expected to keep climbing. The International Energy Agency forecasts demand for these minerals to triple or even quadruple by 2040. This means that the rush for critical minerals will continue shaping international relations.

highlighting the need to address major environmental and social implications. In today's episode, we delve into this multifaceted topic with Olimpia Pilch, Critical Minerals Consultant at Minefield Consulting. Thank you so much, Olimpia, for being here today.

Olimpia Pilch (01:50)
Thanks Giulia and thank you for inviting me to join.

Giulia Bottaro (01:53)
So why don't we start? Just tell me how you got to this world of critical minerals and your experience.

Olimpia Pilch (02:00)
it's definitely not been a usual journey into the world of critical minerals. my background is in exploration geology and at university I absolutely loved the geology of gold deposits. And to me, when I graduated, critical minerals was just an abstract term that someone threw at me and I thought, this is interesting. So I actually started out my career working for an industry body, which was an excellent springboard to learn what critical minerals were in the first instance.

dived into that world, focusing specifically on responsible sourcing, ESG, how that impacts mine development, what governments should be doing about increasing production of critical minerals. And at the time I started out my current narrative was all about EVs, net zero energy transition, which later moved more into the geopolitics, know, how the world operates, defence, military, technology, and all the fun stuff, as I would call it.

So my experience has ranged all across working with various governments, particularly Western governments, and across Africa as well, which has given me a completely different perspective on the world, how different nations view critical minerals, but also led me down the path of working for the private sector and helping people really understand how criticality changes over time, how governments view it, how different geopolitical power plays affect what's critical today.

might not be critical tomorrow and we certainly see this play out at the moment with the various conflicts around the world and how those affect critical minerals.

Giulia Bottaro (03:31)
really interesting career so far and yeah you mentioned so many things that we will touch in this episode which I'm really excited to get to. But first we should start with the basics, so what does it mean to be a critical mineral?

Olimpia Pilch (03:44)
critical minerals are perhaps one of the most misunderstood terms and there's a tendency to conflict importance with criticality. So something that's important to national interest might not actually be critical depending on where the supply chain lies, how concentrated it is, who the players are. for a mineral to become critical rather than just a normal average Joe of a mineral.

It needs to meet two criteria simultaneously. So one of those is that it needs to be absolutely necessary for economic and defence capabilities of a nation. And the second is it must be vulnerable to supply chain disruptions. Now those supply chain disruptions come in many different shapes, forms and sizes. So it can be anything as simple as geological concentration of mining. So for example, if we look at production of cobalt, majority of cobalt is produced in the DRC.

but that's not necessarily where it's being processed and refined, which tends to happen in China. So then we have different aspects of where concentration can occur, for example, within the processing refining space, which is where the major bottleneck happens across different critical minerals. If we look at it from a purely Western perspective, criticality is driven by the intended purposes and needs that different governments have.

So criticality is more about the demand drivers rather than how upstream producers approach it. And they tend to it in terms of what minerals do we have in the ground? What do we need to get out? And what generates the most tax revenue and creates the most jobs? there are different ways of looking at it. However, the very basic definition goes back to, is it essential to national economic and defense capabilities? And does it have that supply chain vulnerability?

Giulia Bottaro (05:32)
We've heard in recent years that many countries have released their lists of critical minerals or sometimes they update them. Are there any minerals that are common to most of these lists or how much do they actually differ?

Olimpia Pilch (05:47)
criticality always and the lists always depend on the point of view of the nation. And we see this play out also in terms of political cycles. if there is an administration that is more in tune with, for example, climate goals or the energy transition, and then you have a replacement with administration that is more focused on defense or tech capabilities, then those mineral priorities can shift.

But in terms of overlap, we see primarily the overlap of minerals which have had many names over the past few years, whether it's energy transition minerals, green metals, net zero minerals, whatever one might call them. Minerals are used for solar, wind turbines, EV batteries. Those tend to be across most lists. However, there are certain distinctions. So for example, in places like Japan,

across several African nations. They're not always necessarily cold critical minerals, but they are adjacent terms such as strategic minerals, which includes things that don't necessarily neatly fit that definition of it has supply chain vulnerability. So gold is always a good example. It's so, so important for people's investment. It's so important for global economy. However, if there is a supply chain bottleneck in one part of the world, the supply chain is so diversified.

it would not cause the same chaos that, for example, the lack of ability to source rare earths on short notice would cause for the defence sector or for the electronics sector or for EVs to have the magnets they need to produce the cars at volume and at scale that's still profitable. So there's a lot of nuances and unfortunately lists are often very political. So when they are designed,

There is the geological and the economic process of trying to establish criticality. The factors that play into it, of course, it's very, very difficult based on data availability to establish all the different factors. So consumer demand, trends within markets, which jurisdictions might be coming online and producing more of a certain type of mineral or a certain concentration or a certain class.

which has price implications. It might be to do with regional tensions. It might be to do with logistics, energy prices. So there is a lot that influences what's critical, but obviously not all of that is captured within these assessments. So we have some confusion sometimes. And if the political winds blow a certain way, we see minerals that perhaps never should have been called critical on these lists, but they have a purpose in terms of

say, administrations, goals or their priorities. Whether that tends to be personal or for the nation's benefit is another question.

Giulia Bottaro (08:36)
Is it possible that coal might be one of these? Was it not defined as a critical mineral somewhere or am I going in the completely wrong direction?

Olimpia Pilch (08:44)
No,

no, no, you're completely right. And there has been a long held debate of whether coal is critical. In my opinion, it's certainly important. But as I said, importance does not mean critical. If we look at coal markets, and we need to differentiate, are we talking about thermal coal or are we talking about metallurgical coal? Now, thermal coal is a hard sell, especially for sustainability crowds and those in favor of net zero. However, if we look at

how much thermal coal has been used up over the past few years, it doesn't seem to be slowing down. And certainly it's still the major producer of cheap energy to enable manufacturing centers across China and to keep prices down to enable global competition. If we look at metallurgical coal, obviously if you want to build steel, you absolutely need it. So is it critical?

I'm going to argue basis on technicality, no. But I can see why people want it to be important. They don't want it to be neglected and they certainly don't want it to fall behind the narratives of lithium is the most important or nickel is the most important. In reality, if these minerals were not important, no one would extract them. No one would invest billions in building mines, even more billions in refining them. So there's always a market for them. Otherwise, these industries would simply just die out.

Giulia Bottaro (10:02)
Thank you for the explanation because I think it really clarifies the confusion that you mentioned earlier. And you also mentioned rare earths and gold. And I think it would be important to clarify that when we talk about critical minerals, we talk about widely different supply chains. Gold is a massive supply chain. I don't know how many tons are produced each year. While rare earths...

are quite small in comparison because you don't need a lot of alerts for the applications. You mentioned magnets for electric vehicles or they're using wind turbines. So that also kind of shows that we're grouping all of these minerals in the same category, but within themselves they're massively, massively different.

Olimpia Pilch (10:53)
Absolutely and another good example is also copper. It's absolutely essential to the energy transition. It's essential to modern life. know our houses are full of copper, everything's full of copper, but it's a bulk commodity and the important distinction to make is that it is a commodity the same way that gold is a commodity, the same way that coal is a commodity. Once you start looking at some of these very niche minerals, so for example, rare earth they are not quite commodities. They don't have

certain markets. If you extract rare earths in the US and if you extract rare earths in Russia, they will not have the same price. It's all very much focused on who they can be sold to. Is it offtake agreements? And there isn't as much of an open market, for example, as with copper or gold, or even some of the other base metals that are traded, for example, on metal exchanges. So there are very niche

differences in how the supply chain work in terms of how finance is raised, how these mines are built and also the scale. And scale is crucial. For lot of commodities, there's the benefits of huge mining companies being able to access finance to develop these projects, sell them on the stable markets. The price is relatively predictable, unless there are supply chain bottlenecks as copper experienced over the past few years. But with rare earths, it's

Production, which is mostly cornered by China, refining happens in China. The domestic market for rare earth applications, which is mostly magnets for the EV sector, again, is concentrated in China. So then you have this entire almost lean and influence of rare earths and prices and the supply chain and how they are viewed globally based on what's...

the CCP decides during the meetings or what the strategy is and also what the consumers within China are doing. comparing a lot of these critical minerals, it's almost like apples and oranges. It's very difficult to compare a gold supply chain to that of antimony, for example, or I don't know, titanium, very, very different applications, different market dynamics, different players. So it's, it can get pretty confusing.

but that's what makes this phase very interesting.

Giulia Bottaro (13:12)
Absolutely. Before we delve into the discourse of the narrative of China and the West, and also it would be interesting to discuss who supplies these minerals, which countries provide the most demand, which are the main demand drivers, because we kind of touched upon them earlier. We sort of just mentioned them, but it would be good to go a bit in depth.

Olimpia Pilch (13:37)
Yeah, so it again, it depends which metal you pick. There's so many products out there. There's so many demand drivers. So if we just look at EV batteries for the sake of it, it's nice and easy. Lithium. So the major producers, Australia continues to be one, although they are going through some pains due to the lithium prices, which have been depressed, but are now on the rise, which is making a lot of developers and miners quite happy. And then you've got the lithium triangle.

There's production in Zimbabwe and Africa as well, but primarily the refining still happens in China, which means there's leverage there. It can be used by the industry in China for its own purposes to produce cheaper and lower priced goods that then can be pushed out. And the value is captured through the end products rather than, for example, the processing and refining itself.

And there seems to be a bit of a misconception and we see this play out particularly through government thinking across developing nations that if they move beyond extraction into just processing refining that they will capture more value. And this thinking is based around, for example, commodities like gold or iron ore, which in those cases it works because the economics are completely different and the stable supply chains are still the markets. Price is fairly predictable, but with niche critical minerals,

Giulia Bottaro (14:45)
Hmm.

Olimpia Pilch (15:01)
It's a little bit more complicated. There's lack of stability. There is volatility. So when governments want to move further into that processing refining space, they forget that it's not a moneymaker. And a lot of the jobs are highly specialized and highly technical, which means bringing in expats, bringing in external expertise. The job creation is relatively low in comparison to if it was just focused on extraction.

And ultimately the value goes to whoever uses those process and refined materials and is able to sell a value added product. So whether that's an EV, a solar panel, a wind turbine, whatever that might be, a phone, a laptop. there's a lot of confusion about how the supply chain actually works, where money can be made, which is why China is so interesting in terms of how they have integrated different parts of the supply chain.

A, to really make sure that domestic manufacturing sector, which is where the money is made, is strong and has access to these critical materials without too many interruptions. And that has meant a strategy of on-shoring as much processing and refining as possible. So traditionally, if we go back to the 1800s, the model used to be, dig out the minerals where they are, have a coal plant or some kind of energy generation as

close to it as possible and then process and refine next to the mine site, stick it on a train, build a bit of a rail track and send it off to the markets. Whereas for China that's meant vulnerability and possibility of supply chain destructions, especially if you're looking at shipping materials, whether it's from Australia, Africa, Latin America, it takes time, which means if there's a supply chain crunch,

you might be left without access for three, four, five months, depending on how long it takes to solve it. So their model focused on really ensuring that processing refining bits. And they have spent a lot of time and a lot of energy investing in innovation, building ecosystems around it, making sure they have cheap energy, making sure they've got access to chemicals. They've got the demand right next to the customers, which means for some trickier critical materials.

that have low stability, very short shelf lives. The problem of transporting these unstable materials across the globe is, you know, almost reduced. So it's been a very, very creative and, you know, decades long process of creating a manufacturing sector that has the basics nailed down, even if the domestic market is not mining as much as is necessary. So it's an integrated approach.

And what we have seen over the past 20 years specifically is Chinese companies being encouraged to go out overseas and invest in major mining projects, building out infrastructure ports to get these materials to market, i.e. to get them back to China. And that works very well, but it also means that it's incredibly difficult for other governments to now break into that space where a monopoly exists. And it's not a monopoly of...

for example, a single company, which is how we tend to think of monopolies, but of an entire nation state and companies that's, you know, we say there are private companies in China, but they're only private to an extent, right? It's a planned economy at the end of the day. So competing with that is difficult. And if we look at nations that are now trying to break into that space of whether it's critical mineral production, whether it's processing and refining, or even if it's recycling.

and I'll touch on the recycling part slightly later on because it's so crucial as well, is you have to compete with a player who has got 20 years of experience. Chinese companies are incredibly innovative. They've got the capital, they've got government backing, so they have the ability to quickly build out supply chains, build out new mines, build out new refineries, not just in China, but globally. And we've seen this, especially in Indonesia, right? So Indonesia has...

put on a ban on exports of raw nickel ore. The goal of that was to ensure that there's more value created within the country, more value is retained and the profits are reinvested into developing the nation. All based on the assumption that nickel will continue to be the main chemistry within batteries. Now China has disrupted that to an extent with LFPs and other chemistries becoming more popular. But

the way that the Chinese invested in Indonesia was incredibly crafty and smart. Perhaps the Indonesians didn't really pay that much attention to the contracts and how this was evolving given the amount of money that was flowing in at the time. But the mine sites are owned by the Chinese, the refineries are owned by Chinese, the infrastructure, the ports, the power plants, it's an entire Chinese ecosystem in Indonesia.

So that creates some geopolitical tensions. But also it means that if you are a nickel producer or a nickel junior trying to mine in the US, you then have to compete with a very tight markets, very established supply chains. And as a little company, how do you then go and knock on the doors of OEMs in the US or in Europe and say, please, can you buy some of my nickel? To which they will say, well, we would love to, however, we make.

Giulia Bottaro (20:02)
Hmm.

Olimpia Pilch (20:28)
cars or we make whatever it is that they make. We don't refine. That's not our job. Whereas Chinese companies have the advantage of saying, well, actually, you we work very closely with refining partners, all of our conglomerates, which have the entire value chain within the company. So it's, it's quite a dynamic space and it's definitely a difficult to break into. But in terms of the demand drivers, it's very much still down to the Chinese consumer market.

if we look at EV specifically, that is the largest growing markets and whenever there is a slowdown, it impacts global production, impacts prices in terms of the minerals, the materials, and it also makes it quite difficult for Western companies to compete. Now, the second and third largest markets center the EU and or Europe more broadly and North America. Now,

North America is a little bit more challenging because US does offer a huge market, especially for a lot of these EV related goods, whether it's just batteries, precursor materials or the actual finished, finished, nice and shiny cars. But with geopolitical tensions and with China's strategy of trying to challenge the US on the global stage, that has resulted in various tariffs on the US side.

various entity of concern rules and really trying to limit Chinese influence over the domestic market and access to the domestic market. political decisions have almost closed, I say almost because Chinese goods still go in, there's still, you know, Chinese businesses that operate across the US, but almost shut that market off, which means that the new and Europe and now the main demand driver for EVs.

outside of China. Now this can change relatively quickly depending on how low the prices of these EVs can be. So if innovation continues and there's ability to produce cheaper vehicles then that opens up mass markets across the rest of Asia, across Africa. But at the moment the price point is still prohibiting wider market adoption across the global south.

As geopolitics plays out, if we look at Iran and Israel conflict at the moment and what's happening to energy prices, what's happening to oil prices, we can see quite quick dynamic changes. And what might not have been viable five years ago might end up being very lucrative and profitable in the next few years. But again, it's so dependent on so many different factors.

it's very difficult to say how these things will shift and change over time.

Giulia Bottaro (23:18)
Yeah, feels like there's something new every day. You mentioned earlier that ⁓ when you started working in this space, the interest was about the energy transition and then it kind of moved to the defense side of things. So you talk to me a little bit about this shift?

Olimpia Pilch (23:34)
if we start from why there was such a huge almost buy-in from the mining sector and people talking about critical minerals in the first instance was because of the different COP conferences, climate agendas, different goals, obviously a lot of governments signing up to climate resilience action, etc.

And that almost created a narrative opportunity for the sector, you know, I'm being very inclusive when I call the critical minerals a sector because it's, so many different little sectors within it. It offered a nice narrative and an opportunity to finally pitch itself as useful to society, which in my personal opinion was a huge mistake. mean, mining is the foundation of society in the first instance. There's no science, there's no innovation, there's no transport.

we go back to living in caves if we just forget the sector. But it's often the opportunity to appeal to younger generations and to really carve out its own place within global discussions on, look guys, we are important. We have a bad reputation for various reasons. Sometimes it's justified, sometimes not so much. But if we're going to transition towards more renewable energy, green energy, whatever one wants to call it, we're going to have to mine more.

And that's just the reality of economics, the reality of the technical capabilities we have with respect to recycling and what's possible with technology and with current energy prices, et cetera, et cetera. So that's how it really got attached to how critical minerals got attached to energy transition. And that's how they really got recognition across a lot of government desks. So the issue with

supply chain vulnerability and offshoring and specifically Western manufacturing powerhouses becoming reliant on third party actors or you know on China or other jurisdictions. The alarm bells have been ringing for decades but unfortunately no one was listening to these people because it wasn't politically a nice and neat topic to discuss you know within number 10 or the Oval Office or in Brussels whatever right.

It was a case of, why do we care about a bit of mining? And it was always pushed to the back. We want to have the quick wins. We want to have, you know, the big investment announcements. We want to have great PR headlines because ultimately, we just look at the Western world, it's all about election cycles. It's all about what sells and what gets voters. Now, mining traditionally does not get voters, especially over the past 30 years or so because of public perceptions and whatnot.

So that's how critical minerals got attached and catapulted into this space. We saw the shift when the markets didn't do what the policy makers anticipated. despite the IEA predictions, which are based obviously on policy scenarios. So if the market follows what the policy is saying, the next amounts of green energy is produced from

these specific technologies, this is how many energy storage units you're going to need, this is how many solar panels you're going to need and all that jazz. But we didn't see the market follow. Despite the billions committed into climate action, despite the billions that flew into energy technologies, the main market remained in China, where they had the access to the minerals, they could do it cheaply, they had the skills, the tech, the innovation.

And they had the government mandate to deploy these things and stick these massive solar farms that cover entire hillsides, connect it to, for example, hydro and really make sure that the energy grids and ecosystem work cohesively while still relying on coal to ensure that manufacturing of these green energy technologies is cheap. So it's a little bit ironic that.

Giulia Bottaro (27:31)
Okay, bit of a contradiction

there.

Olimpia Pilch (27:34)
It definitely is. And most people don't think about it. their EVs and the solar panels on the roofs of the house. It's courtesy of coal, right? Because it makes them cheap enough for people to be able to purchase them and then deploy them at scale. it's, I guess this is

Giulia Bottaro (27:49)
So it's not the actual

scale of production that made it cheap, that made these products cheap, because that's an argument that I've heard countless times, the economies of scale.

Olimpia Pilch (27:59)
So China definitely has that advantage in terms of the more you produce, the bigger the volume, the more the economics line up in the company's favor. But also there's the argument of subsidies and there's the arguments of, well, they have both the people or the domestic use of a lot of these technologies, but also the industry. So it's a little bit more.

integrated let's say rather than for example if we look at a nation like the UK where you know retrofitting the grid is going to be a very very expensive exercise and with the current state of our budget how's that going to happen realistically and how do you get people to buy these technologies you've got to import them from China it's a lot more complex rather than having manufacturing most of the supply chain and the consumer in one place so

It's comparing the West to China is again a case of apples and oranges. But going back to the earlier thread of, know, coal underpins a lot of this. It's definitely interesting. And I guess that's where the transition part comes in. Whereas a lot of policy, especially in the West focuses on just let's cut fossil fuels at the knees. And let's just go straight for straight for the, you know, the nice green tech without

realising what it actually takes to manufacture that stuff, what it takes to create the supply chains. And this is where China has the advantage, right? They understand how things are made, they understand how long it takes, what government support is necessary, whereas the West operates on free market bases. And the free market, unfortunately, didn't respond that well to what policymakers were saying. And a lot of it is

almost deeper than just purely the OEMs and the manufacturers decided we don't want to produce solar panels or wind turbines or EVs. It's the stiff competition from China, but it's also how consumers behave in the West and what's going on socially and economically. So if we look at Europe across various nations, there's a cost of living crisis, there's very high energy prices, which means that EVs are not something that people can adopt very easily.

unless they buy very cheap alternatives from China. Now that comes with geopolitical implications. There have been cases in Denmark and other nations where Chinese technologies were weaponized to switch off vehicles and buses and there have been cases of data gathering. So that does create almost a public safety concern, but also geopolitically.

you know, are these vehicles, for example, mapping critical infrastructure? Are they trying to map out bases, etc., or anything that's of importance? So it creates almost a clash between geopolitics, competition at the international level, and then consumers, and how you can appeal to the consumers. There's also things like perceptions, right? Most people, if they think of Chinese made goods, they think

or something, you know, fairly crappy and useless, which isn't the case in a lot of goods. There can be quality. It depends what you're willing to pay for them. And it also depends, you know, how people use the various goods, what kind of parameters they want, whether they want quality, whether they want to replace it fairly quickly, the distances. And also, we live in the, I think someone called it recently, the post-truth era,

where you read something on the internet and if it strikes you and appeals to your emotions that becomes a fact. So trying to dispel a lot of misconceptions and also having people think about how quickly technology moves on right. So a lot of the ideas that people had about EVs efficiency how much they cost have changed drastically over five years but if someone has one of those very early EVs and they're turned out to be crap.

and it costed a fortune and it was always breaking down. They're to hold on to that perception next time they want to buy a brand new one, even if the technology has moved on. consumers are still the main driver. But Western policymakers have forgotten that they are looking after populations used to free markets and free will. And they are trying to almost establish

energy transition and various other policies which are more reflective of planned economies and they are more similar to for example what China can get away with because they are a communist nation because they can say to the population this is what you're doing and you don't have a choice whereas in the west we still have the relative perception of choice so roundabout way of answering your question

Giulia Bottaro (32:47)
No, it's been an amazing overview, really ⁓ well done because this is extremely complicated stuff, but I think you provided a really nice overview. One thing that springs to mind is the fact that sometimes it feels like policymakers in the West aren't really adopting a holistic program for the transition.

So you mentioned China has thought about everything from upstream to midstream, downstream. It's given subsidies to both the companies that are producing these products and also consumers. So it's easy for them to adopt the EVs. I mean, we just stay in the example of the EVs, which is easier. in the EU, for example, in Italy, we've had EV subsidies that lasted, they were like a one-off.

you sign up once and if you're lucky you get it. Other countries have phased down all the subsidies, So it feels like we're really missing that element of, as I mentioned, holistic thinking.

Olimpia Pilch (33:47)
Yep, definitely. And it plays out not just across EVs, but across all the other supply chains, right? even if a nation wants to take a different tack and look at hydroelectricity development, the supply chains are still not in the West. The upstream is down in Southern Africa. A lot of the refining is also happening in China, but in other places. And it's almost wanting the cake without making the cake.

or sourcing the ingredients, right? It's just a case of a quick Amazon delivery, except in this case, it's, delivery from China give us everything without the geopolitical challenges. So please do not spy on us. Please do not try to, you know, figure out weaknesses. And also whilst you're producing these very cheap goods for us, please make sure you're not undercutting our industry and not taking them out of business, right? You just, it's impossible, right? And the problem that the West has

is almost a memory loss of how these very nations have been built and they have been built by industrialists through manufacturing, through system thinking, how do things interlink? where do we get our energy from? Are we entirely reliant on foreign actors? Can we make that energy cheaper? Should we be producing something at home? But it's been, decades of people going, well, actually, we don't want to build anything here.

because we think it might be dirty, we think it ruin the landscape, we're just going to offshore it somewhere else, right? Let it be someone else's problem. Let them deal with toxicity of various mine tailings or trying to clean up water that's being used for manufacturing, whatever the case might be. And it's almost, you know, trying to build a utopia built on very grandiose ideas of what's

a post energy transition world should look like without actually thinking how it will be built. What are the trade-offs? And there are always trade-offs. It doesn't matter whether you move into completely green energy or if you stick with coal and oil, you're always, sacrificing something, right? And there hasn't been enough discussion and enough thinking on actually what policymakers are willing to give and sacrifice and what the public is willing to give and sacrifice, right?

It's all very nice and well to have discussions about, well, in theory, I would love to buy an EV and have solar panels on my roof and, make sure everything is super green in my house. Of course, most people would. But then there's the practical reality. If you look across, working classes across Europe, can they do that? Is that, you know, financially possible for them? The answer is no.

So then how do you deliver that at scale? You you can't build utopia with only 5 % of the population living the green dream and the rest of the population can't to follow policy. So it's all very much been built around ideology and essentially hopes and dreams without actually thinking, well, it's not going to be built overnight. It's going to take years. It might take a few decades, but this is step one. You know, this is step two.

How do we get our energy cheap enough to manufacture this stuff? How do we get consumers to want to buy this? How do we make sure that these products are innovative enough to improve people's lifestyles, right? Because a lot of the time when we buy things, we don't buy them purely because we think they're good. It's because they have some kind of value, right? Whether it's because they're trendy, because other people also have them, or because they make your life more convenient, right?

And we definitely live in a society where convenience is crucial and policy just hasn't thought about it at all. especially in the EU, the policymakers have almost created a scenario where it's the energy transition, cheap, but completely made by China. And that's also risk sovereignty, independence, and

It then ensures that Europe is completely at the whims of Chinese markets, right? It has huge implications on where finance will flow, where jobs will be created. if you look at manufacturing centers like Germany, what's going to happen to thousands of regular people who have been working in industries that will no longer exist because those products will be replaced by Chinese alternatives? So it's only the transition cheap with China.

at a very huge cost to sovereignty and economic developments and all that stuff. Or it's a delay in the energy transition and a very painful lesson in trying to create these supply chains, trying to build partnerships. Now building partnerships is increasingly more difficult because it's not a case of, you know, Italy or France will just stand up at someone's doorstep in Latin America or, Africa and say,

we'd like to buy X amount of minerals or we'd like to stick a mine here and the people go yeah please thank you the context has changed completely and China has had a huge role to play in that with how they have approached partnerships with how they have approached the global south and certainly with forums like BRICS and you know other platforms where nations which traditionally feel neglected by western powers have had a voice they've had the opportunity to go out

Giulia Bottaro (38:41)
Mm-hmm.

Olimpia Pilch (39:05)
out to Beijing, they've had the opportunity to not just feel important, but to be integrated in discussions on, know, supply chains, partnerships, and being integrated into the Chinese system. Although, critics will always say it comes at a huge cost to these nations. And that is true. There's, you know, poor contract negotiations. If you look at how China invests, it invests to benefit the Chinese, not the local

communities, not the countries it does business in, which is fairly ruthless, but it's not much different to capitalism, right? That's, without shareholder and stakeholder capitalism and that stuff. So trying to navigate those partnerships becomes a lot more difficult because suddenly the perception of the West has been turned from almost being the friend.

and someone that a lot of these nations looked up to for, you know, how these countries have developed, their economies, how they are run, how the societies operate, has suddenly been presented an alternative, which is China. And if we look at, for example, South Africa and a few other nations across southern Africa, suddenly the West becomes the foe, not the friend, right? And it's a case of, well, if you want to do business with us, here's a strict criteria of conditions that you must meet.

which realistically a lot of Western businesses cannot meet, whether that's through governance, challenges, environmental commitments they may have. And it's actually the environmental commitments within Western companies that create a lot of chaos within trying to develop or source materials from the global South, where the energy mixed typically is quite carbon heavy. But regulations within Europe and commitments

that shareholders have voted for within Western companies say, well, actually, unless it's a very low-carbon product, you can't have it within your ecosystem, it can't go into the end product. So then how do you balance partnerships sourcing from other nations in the absence of obviously having domestic supply chains? And then how do you also balance supporting those producer nations in the global South to develop?

and help them make sure that they get the most benefit out of these resources rather than it being a race to the bottom of prices tumbling down, market monopolies and realistically very little tax revenue for these countries to develop, invest that money into schools, infrastructure, hospitals, et cetera. So building relationships and building partnerships has changed drastically. And the other aspect of that is also the disservice.

that especially Europe has done for its own image. And that goes back to a lot of preaching on climate goals, a lot of getting up on a soapbox and saying, you guys are terrible because you use coal energy or you use oil and gas and look at us, we're fantastic. Look at our beautiful climate goals. But then when you actually look at Europe's energy mix, there's only a few nations that are doing very well. The rest are still not much better than the nations that

Europe is preaching, preaching to change their ways. So that narrative has definitely hurt, you know, how the West is perceived.

Giulia Bottaro (42:30)
Yeah, I suppose there was a lot of talking a few years ago and now that should be the time for action. We're only seeing either zero action or backtracking or watering down of policies. So you've painted this somewhat challenging picture, let's say, of... I was going to say depressing and then I thought, it is slightly depressing. But you know,

Olimpia Pilch (42:48)
That's a polite way to put it.

Giulia Bottaro (42:56)
Ultimately, what we want at Shaken Not Burned is a just transition. So that includes communities and the environment. How do you see this critical mineral challenge moving forward from a geopolitical perspective? Will it be China and the Global South against Europe and North America? Is there a way that we can all collaborate? I know that that is obviously a utopian.

view let's just not have any more wars and let's just collaborate and be friends I know it's slightly delusional but realistically what how do you think it will play out in the next few years?

Olimpia Pilch (43:34)
I think it's a very difficult question to answer because there's so many different competitions almost happening across the globe for different minerals and different segments of the supply chains. think collaboration at a global scale is probably very, very unlikely. And that goes back to almost geography and how nations are structured.

history as well. That's a huge factor in how different governments think about their nations, their people, their goals, their strategies. China is certainly very keen on almost rising as a civilization again, and they've put a lot of effort over the past hundred years into rebuilding China. It has come at a huge cost to the population, especially in terms of some of the environmental

want to say damaged, but it's more atrocities in the Mongolia. as these new and niche minerals were being refined, it was like the Wild West. There wasn't a template on how to refine it the way you can in copper or gold, where there are very established processes, are relatively clean. There's been a lot of time and energy and money spent on making sure that they are as least environmentally damaging as possible. Whereas with some of these

niche materials over the past 20 years. No one's done it before, so it was a case of learn as you go along. So from their perspective, they've paid the price, they've been servicing the world by producing goods for everyone for quite a few decades now, and they want to capture the benefit of their investments. And it's been a very long-term investment, so they want to see the profits come in now. So you cannot really blame a nation for wanting to do what's best.

Giulia Bottaro (44:55)
Mm.

Olimpia Pilch (45:19)
for it or what it sees as being the best for its people and for its durability and its future. But at the same time, the US and the existing world order is being challenged, which means how do we balance that out? There's certainly a lot of global South nations hedging their bets on China as being the winner.

And there are others which are playing all sides. And you kind of see this almost play out across Africa a lot more, as well as Central Asia is another place where it plays out, where there are so many different interests. You've got the Chinese interest, you often have Russian interests, you have typical European and individual European nation interests. You've also got the US trying to flex its muscle and remind people that, of course, you know,

Giulia Bottaro (46:02)
Mm.

Olimpia Pilch (46:12)
Dollar still rules the world, so there's oil and there's a global financial system that works a certain way. But in terms of critical minerals themselves, ultimately they are not the end product, they're not the end goal. So when nations compete for them, it's not for the sake of having them.

When the US is investing a lot of taxpayer money into building initiatives like Forge or whether it's, know, stockpiling efforts, it's not for the sake of having them and hoarding them. It's because they have a use in defence, in supporting domestic manufacturing and insulating it from shocks that may come if China decides to use critical minerals as leverage and ultimately as tools of diplomacy, which is what we've seen China do.

from export bans, quotas, restrictions to licensing systems which do not favour Western producers. So ultimately, I personally think the competition will continue. It's how other actors respond to it. Now, Europe's role in this almost economic and I suppose power perception conflict between US and China is utterly crucial.

because China needs Europe to sell its products to. But if Europe doesn't want to take these products, that creates a very serious economic problem for China. So maintaining relationships with Europe are crucial. We're seeing some, at least in the headlines, fallout between US leadership and European nations.

Giulia Bottaro (47:32)
Mm-hmm.

Olimpia Pilch (47:52)
definitely there is a lack of seeing eye to eye whether it's just on climate goals and the energy transition, but also on security partnerships and certain countries within the European Union and more broadly within the European continent aligning a lot more closer to China, which you know, the US sees it as a threat. Other nations within Europe see it as a threat to their manufacturing. And ultimately, once you're within the EU trading bloc,

goods can move around quite quickly. So if one nation is allowing it, it does undermine the whole ecosystem as well. In terms of potential conflicts over critical minerals, that is unlikely to take shape in armed conflict. It's most likely to just stay at the current level of it's been described as a Cold War, but economic, economic conflicts.

trade barriers, tariffs, espionage and market manipulations. They are likely to persist. But that does mean there is opportunity. so whilst you know, you've pointed out quite rightly, it sounds very depressing on the outset of it. If there is a way for Western companies to be a little bit more nimble in how they operate, there is absolutely no reason why they cannot find alternative

half ways to market, i.e. why they can't form partnerships with smaller manufacturers across Western no reason why we can't start extracting in the West again. Again, it will take work, will take changing public perceptions, it will take education, making people understand that the mining that exists

in the average person's head as pickaxes or trucks and dust and noise and chaos and toxicity is not how modern mining is conducted. And it's also not how mining in the West is conducted. A lot of time and effort has been spent in making sure that there's as little disturbance to both communities and the environmental ecosystems. There are mine sites which have created wonderful partnerships to reduce the waste and repurpose that waste.

for example, as alternative materials for roads and tracks and pathways, or have combined the business model with agri-processing across Africa to really benefit communities. And also rather than just having a local ecosystem built on just purely mining and extraction, there's another revenue generator that the people can lean into and other businesses can spring around. So there is actually a lot of hope.

But there needs to be more acknowledgement from policymakers. That's the path they have chosen of just purely saying, well, let's not mine. Let's not use fossil fuels. let's cut everything and just go straight for the utopia. It's just not going to work. There are steps, right? It's almost like re-industrializing all over again. So you have to have cheap energy. You have to have your infrastructure.

working very well. You you have to have the investments, you have to have incentives for investment to flow into the right places. And you always have to step back and let the industry get on with it. Whereas we see a lot of regulations, a lot of bottlenecks, and a lot of flip flopping. I mean, you rightly pointed out there's a new term every other day on some kind of policy, because it hasn't been thought out in the first place. Therefore, in the sequence that the governments have issued it, it just doesn't work.

If it was reordered slightly, if there was a little bit more of private input into that from private businesses and people who have built these things in the past, then it can work. Because there's no reason why we can't have at least relatively cleaner energy grids for production. But it's a system approach, right? Ultimately, initially, a lot of these technologies will need to be built using very unclean sources like coal.

or oil or whatever before the whole system can catch up and eventually you'll be producing this stuff with solar energy or hydro, whatever it might be. But we're just not there yet. And there are steps and we still need to figure out where the supply chains will come from and how that will affect China and how strongly China will react to the West trying to...

creates almost these ecosystems by themselves when China has banked its entire growth strategy on ensuring that the West is dependent on their goods. That's always going to be a point of geopolitical tensions. And it's always going to create potential for conflict in terms of in terms of China maneuvering in

unbecoming ways across various partner nations or even in terms of how they approach trade and how they operate within Europe. So in terms of trade-offs, there are many, but it's not a case of it's mission impossible. It's a case of we know where we want to get to, but how we chose to get to is completely wrong, right? It's like saying, let's go to the moon or let's go to the Mars, but we're not going to use any rockets.

Giulia Bottaro (53:19)
Yeah. Yeah, I suppose it's, as you were saying earlier, a lot of policy in the West is dependent on election cycles, but mining slash creating an entire economic system is a very long-term view. I have one last question for you. You mentioned earlier recycling. Is it possible that one day recycling will replace mining and extracting

the ground.

Olimpia Pilch (53:47)
I think it depends on which minerals. in terms of commodities, so traditional commodities and a lot of base metals, it's already happening. However, given the demand and the consumption of these metals, it's almost impossible to entirely replace it. Now it also depends on at what scale you're looking to replace mining, right? If it's at a very small scale of, for example,

let's say all of the UK's copper production will come from recycling. Over time, in theory, it's possible if you have a closed loop system, you assume you're not exporting out more than you actually need in terms of goods produced. And you have good collection systems, energy prices are low enough to enable it. And this is the part that a lot of people forget that when you are refining minerals,

it's not that different to recycling them because to recycle them you also need huge amounts of energy and in most cases you then need to refine them further for them to be useful again because in most cases you don't get pure metals you don't just get a bit of copper that you then just smelt and you know recycle and rework into a new product it'll be an alloy or it'll be some kind of material that needs to be broken apart you know there's chemistry involved

breaking bonds apart. It's incredibly energy intensive. It's also chemical intensive. So in terms of recycling absolutely everything, it's probably not feasible for the next 20, 30 years, especially when it comes to niche metals. And if we look at phones or electronics, it's very, very tiny quantities of very valuable metals.

that we would be interested in. Now separating them out is a nightmare from a kind of logistical perspective from the actual processes and that all adds up to costs. And then in the first instance you need to collect these items, right? We've all got drawers in the house full of crap with, you know, old headphones, wires, old phones we haven't used in ages or old electronics. But there aren't any systems designed by policy to make it easy enough for people to recycle them.

Giulia Bottaro (55:46)
Mm.

Olimpia Pilch (56:09)
there are various schemes for phones where you can, you know, trade in your old phone and whatnot. But in most cases, like what do you do with your wires? What do you do with the crap you've got laying around your house? Most people aren't going to go out of the way to drive it to a local recycling center. And then even within these recycling centers, it's mostly the metals and materials that are most commercially feasible. So aluminium, copper that get recycled the most.

Actually lead acid batteries are quite widely recycled as well. That was driven by regulation. So that's a success story that could be replicated to an extent. But when it comes to niche metals, so galliums, germaniums, know, high purity quartz, it's a very different game. It's very expensive, actually just sourcing enough materials to get.

sufficient quantities to achieve enough of a scale to make it profitable across a single nation, a small nation is next to impossible. Across a region like Europe or the European Union as an ecosystem, it becomes a little bit more feasible, but then you have to weigh up the environmental considerations. Are you then trucking or putting huge amounts of electronics?

on ships or across railcarts to transport them huge distances just to recycle them in an economically feasible way. There's also technological limitations. A lot of niche critical minerals have very poor recovery rates of less than 2%. Now there's very little point to recycle those materials if most of it is going to be waste anyhow. And then what do you do with that waste? Well, until technology improves.

There's not a lot that can be done. The other aspect is also the minerals we used over the past hundred years were very different to the minerals that we use today. So based on the trajectory of how quickly technologies change and how quickly niche minerals have grown in the volume that are being used across, things like sensors, lasers, et cetera, or even advanced manufacturing and industrial equipment.

how quickly that has evolved and is changing. What we're mine today might not be what we mine in the next 30 years, right? So it's all about time horizons and it's all about geographies. And that's, know, purely viewed from a Western perspective. If you then look at the global South and the stage of development that different nations are at, it's very unrealistic and also quite unfair to turn around.

to a place like Angola or Zimbabwe or Mozambique and say, well, you guys need to stop mining. That's your revenue gone. You need to figure out how else you're going to build your nations, how you're going to manufacture without actually having any materials to manufacture from in the first place. And you need to recycle everything. It's just, you know, in places where infrastructure hasn't been built yet or is crumbling or dilapidated or where there's not enough energy, where half of the population don't have access to electricity.

And then you say, no, as a nation, you need to recycle everything. A little bit sketchy, in my opinion. there's just a lack of almost understanding and appreciation of the world outside of very kind of closed bubbles of people who live, in places where everyone driving an EV wouldn't be too much of a distant kind of utopian thought.

and everyone having solar panels wouldn't be that drastic and recycling phones because it's a very small community. Often it's well off. There's the financial means, there's the will. But if you compare it to people in nations where they're just trying to survive or they're just trying to find enough money, make enough money to send the kids to education, it's a very different consumer market. It's a very different consideration. So as we talk about the energy transition and I work a lot across Africa,

Giulia Bottaro (59:56)
Mm-hmm.

Olimpia Pilch (1:00:18)
It's misguided and misplaced in those conversations in the global south because those nations haven't even built, efficient energy systems in the first place to then transition them, right? It's again that sequential kind of progression. If they haven't built it in the first place, they haven't built the grids that are stable, that don't have load shedding, that have enough energy flowing through them.

How can they then go and invest more money in, at the moment, more expensive, greener solutions? It's just not going to happen the way that perhaps policymakers think and that a lot of people in the Western world think as well. It's just a step change and it's about recognising that different nations are at different stages. And even if we just take a very kind of plain view of developed nations.

Comparing the US to Belgium is just absolute insanity. Different geographies, different consumer habits, different energy reliance, different ways that the local kind of financial ecosystem work in terms of which investments are favored, where cash flows more readily. So I guess my only message, if I ever had one for policymakers, would be to actually look at their nations, what their nations are doing, what the people need.

where the bottlenecks are and how to fix it from the ground up. Fine, you know, have your beautiful, utopian views one day. We can definitely strive towards them. We can definitely build towards them, but we need to build out and build up to them in the first instance.

Giulia Bottaro (1:01:58)
Thank you again Olimpia for this excellent overview of critical minerals, the geopolitics driving all these dynamics and laying out the challenges that are there. you said, mining is somewhat considered maybe by the public an industry of the past, but actually so many objects we touch every day are made of metals that have been mined. And so this is a real challenge that needs to be addressed.

Thank you to our listeners for tuning in once again. This is part of our mining arc. We also have an episode on deep sea mining. We have an episode on the social challenges for communities. And then Felicia and I will also do our recap at the end of the series. We also have a newsletter. We are on social media. And if you have the time, please...

rate the podcast because that really helps us get into more ears. Thank you again and see you next week.