Energy & resources, explained.
The choice is between two ways of pursuing speed: compressing opposition through political acceleration, or building the legitimacy conditions that let projects survive long enough to produce (Aree Thaisagul/Getty Images Plus)
Democratic governments are treating community consent as an obstacle to supply – just as China has worked out it isn’t.
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Critical minerals: The West is learning the wrong lesson from ChinaCritical minerals: The West is learning the wrong lesson from China
The West is trying to break China’s grip on critical minerals by copying the one thing that China is now abandoning. The premise is that China’s advantage came from lesser environmental and social obligations – letting it dig and refine faster and cheaper. It is the wrong lesson.
Weaker environmental, human rights and labour standards were a contributing factor to China’s critical minerals dominance, but not the engine. China’s control came through processing and refining, supported by patient state capital willing to run projects at a loss, and an integrated industrial base of accumulated engineering know-how, intellectual property and scale.
China’s low-standards approach has created commercial risks, which it has started to recognise. In Indonesia, China’s nickel investment caused deforestation, poisoned waterways and fatal smelter accidents, triggering licence revocations and demands from NGOs for higher standards. All this has put Indonesian nickel buyers under pressure.
China is now lifting its environmental and human rights standards as a practical measure to reduce delays and avoid stranded assets. Whether China can build the culture and governance to deliver is another question – but it is notable that Beijing can already tie poor standards to financial consequences, and that the demand to act is coming from the Chinese Communist Party.
That is what makes a Western race to the bottom a losing strategy twice over. It would surrender the one advantage allied democracies actually hold – the capacity to develop minerals with durable community consent.
The instruments now being deployed in Western countries are precisely those most likely to amplify risk on projects that have not earned community consent.
Yet as G7 leaders prepare to meet at Evian on 14–16 June, the democracies that built environmental and community safeguards are considering an emerging architecture – strategic-project designations, accelerated permitting, sovereign guarantees, security exceptions and public-interest overrides – that is designed to compress the friction around critical-minerals projects. Under such a framework, legitimacy is treated as an obstacle to supply security rather than the infrastructure that makes durable supply possible.
The move at the G7 must be considered along with national actions such as the EU’s Critical Raw Materials Act, which now designates selected mines as being of “overriding public interest”, allowing them to proceed despite impacts that would previously have triggered protections. Canada has also proposed National Interest Projects to bypass parts of federal environmental regulation.
In the benchmark Spektrum conducted across 50 projects in 28 countries representing US$370.6 billion in combined value, we found nearly two-thirds exposed to legitimacy risks – community conflict, legal challenge and political reversal – that G7 strategy still treats as secondary. We also found that political decree – the sovereign override of community objection – led to worse outcomes in 98% of cases. The instruments now being deployed in Western countries are precisely those most likely to amplify risk on projects that have not earned community consent.
Mine lead times for mines across the world to move from discovery to become operational have stretched to 17.8 years, nearly three times the 1990s figure. The binding constraint is no longer whether a project can be built but whether it can hold legitimate consent through the years between design, approval and production.
An aerial view of Harjavalta in southern Finland captured in November 2021 (Wikimedia Commons)
Harjavalta, in southern Finland, was meant to showcase European mining and processing. BASF built a precursor cathode (pCAM) plant there to enable a non-Chinese battery supply chain. Completed three years ago, it has still not operated commercially. It has been stopped by a community-led legal campaign over adverse environmental impacts.
The failure was not technological but with the regulatory design. Satisfying Finnish permitting requirements, it ignored the binding standard set out under the EU Water Framework Directive. This directive requires no deterioration of waterways. The government issues the licence twice; the activists challenged twice; the company defended itself and lost twice. Its licence now requires a crystalliser to clean the plant’s water emissions before release, which it has not built.
Activists involved told us the issue was never opposition to the plant but its failure to address water standards – a constraint that, treated as a shared design problem rather than a legal obstacle to be defeated after approval, could have been resolved years earlier. Instead, Europe’s flagship non-Chinese pCAM plant sits idle. Finland may yet have every part of the battery supply chain dug and processed at home except the vital precursor cathode – which it will ship in from China.
Shaping projects above compliance obligations is the safest route to legitimacy. When companies justify lower standards on the basis of a critical-minerals emergency, they accelerate dissent. A change in behaviour is the most recoverable lever.
The choice at Evian is not between speed and consent. It is between two ways of pursuing speed: compressing opposition through political acceleration, or building the legitimacy conditions that let projects survive long enough to produce.
This is no longer simply a race for minerals. It is a contest over which system can build projects that remain politically, legally and socially viable over decades.
About the author
Katherine Teh
Katherine Teh is Executive Chair of Spektrum with more than 25 years of board and executive-level experience diagnosing system-level risks and renewing business and risk models.
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