This past week, three countries with interest on minerals energy – Botswana, United States of America and Peru signed a Memorandum of Understanding on critical energy minerals.
The critical energy minerals initiative is designed to, amongst other things, promote best practices in the mining sector and resilient energy mineral supply chains. It also aims to diversify the relatively concentrated production of some strategic metals, in particular, those that are critical to the manufacturing of electric vehicles.
Botswana just like Australia, Canada, Peru, and the United States recognize the increasing global demand for critical energy minerals in the coming years, and the MoU puts forth the essential framework for cooperation to effectively meet the demand.
In addition to the technical and professional aspects, ERGI will also encourage the adoption and implementation of high safety and environmental standards in all mineral development projects globally. This effort will, additionally, help ensure these projects are attractive to international investors.
This initiative is also expected to bring countries together to advance governance principles, share best practices, and encourage a level playing field for investment.
The ERGI is also said to be an initiative to support the discovery of strategic metals such as lithium, copper and cobalt that are used to make batteries for electric cars.
Reports indicate that over 80 percent of the global supply chain of rare earth elements, important minerals for electric vehicles and wind turbine components, is controlled by one country. ERGI is said to then identify options to diversify supply chains, facilitate trade and industry connections as well as promote integrated and resilient supply chains.
It is also meant to encourage development finance and export credit institutions to support responsible and sustainable mining projects.
Botswana’s mineral revenue in 2019/20 declined to P8.7 billion from P13.3 billion in 2018/19. The mining industry however continues to grow despite the volatility of commodity prices.