The session addresses strategies for Commodity Dependent Developing Countries (CDDCs) to take advantage of the increasing demand for goods associated with critical minerals by adding value “on-site” to mineral ores, capturing a larger share of value in the mineral’s value chain, and stimulating economic diversification in CDDCs.
Many developing countries hold large reserves of these minerals, with some already playing a central role in supplying world markets. These countries have traditionally been highly dependent on exporting primary commodities, exposing them to volatility in the international commodity markets. There is fear that if things stay as they have been, the new scramble for critical minerals might perpetuate or even aggravate the adverse effects of commodity dependence on CDDCs.
Onsite value addition to critical minerals would generate more benefits for host countries through employment creation, higher tax revenues and export earnings, and a reduction in the volatility of export revenues. It would also contribute to host countries’ industrial development and economic structural transformation by introducing new upstream and downstream activities in the mining sector - from different extraction methods and mining technologies and equipment, to processing minerals and spillovers in chemical processing and material sciences, to manufacturing into battery components. Opportunities also exist in research, development, and end-of-life product management services. In-country value addition will also diversify international market supply sources, addressing the current market concentration affecting some strategic minerals.
- Why is it important that developing countries add value to their critical minerals domestically before they are exported to world markets?
- What are the challenges and prospects for CDDCs to implement an on-site value-addition strategy for critical minerals?
- What are the investment strategies that could support that objective?
- What is the role of international cooperation in promoting onsite value addition to critical minerals?
- What measures could developing countries rich in critical minerals adopt to successfully add value to their primary commodities before they are exported to international markets?