CRITICAL MINERALSManaging the Dark Side of the Critical Minerals Rush
As the world scrambles to meet the demands of a clean energy transition, it’s tempting to focus on the environmental, social and human security costs of mining. But focusing solely on these negative externalities obscures a hard reality: without mining, there is no energy transition.
Australia and its partners must move towards frameworks that manage, rather than merely lament, the negative side-effects of critical mineral extraction.
As the world scrambles to meet the demands of a clean energy transition, it’s tempting to focus on the environmental, social and human security costs of mining. But focusing solely on these negative externalities obscures a hard reality: without mining, there is no energy transition.
The United Nations Office on Drugs and Crime (UNODC) 2025 report on mineral crime lays bare a global crisis. Rising demand for critical minerals amplifies environmental degradation risks, organized crime and corruption. Gold is a central case study with its high value and ease of laundering. But this is also a story of market failure, regulatory lag, and global systems’ inability to enforce credible environmental, social and governance (ESG) standards across mineral supply chains.
The world wants cheap minerals quickly. Demand for lithium, cobalt, rare earths and nickel has soared as governments and industries chase net-zero targets. Yet global markets remain reluctant to pay the ESG premium necessary to ensure these minerals are mined and traded ethically. This has created a distorted incentive structure that rewards opacity, weak governance and criminal infiltration, particularly in producer states already under stress.
The UNODC report reveals how transnational criminal networks are seizing on these gaps. From West Africa to Latin America, cartels, armed groups and corrupt elites are embedding themselves in mineral economies. They leverage violence, fraud and influence over regulatory agencies to secure access to sites and smuggling corridors. These actors displace communities, damage ecosystems and launder illicit profits through legitimate mineral exports.
ASPI’s 2023 and 2024 Darwin Dialogue reports highlight that the concentration of processing capacity and supply in fragile or authoritarian jurisdictions creates dangerous chokepoints. Criminal interference or geopolitical tension could disrupt clean-energy supply chains at scale, delaying the global transition and undermining confidence in net-zero commitments.
These reports also stress that the energy transition mustn’t come at the cost of social cohesion or regional stability. In resource-rich countries, mineral crime fuels discontent, fractures governance and deepens inequality. This threatens development outcomes, investor confidence and diplomatic relationships. When extraction undermines the communities it’s supposed to uplift, the legitimacy of the energy transition comes into question.
