Mining in Africa: Are local communities paying the price of the global energy transition?

Abstract

The energy transition is crucial to unlocking the potential of the Paris Agreement and the global climate goals. To meet the projected demand for the transition, critical mineral extraction is expected to significantly increase in countries of the global South. The critical mineral mining boom has the potential to drive economic development, contributing to the achievement of the Sustainable Development Goals (SDGs) under the 2030 Agenda. However, considering historical tensions between extractive industries and development, critical mineral mining risks exacerbating socio-economic inequalities and poverty.

Against this background, the paper investigates factors influencing the local socio-economic impact of critical mineral extraction. Using satellite data and mining data from the S&P database, the study examines the socio-economic effects of 94 critical mineral mines that opened in Africa between 2000 and 2020, focusing on mineral-specific attributes and contextual factors, as well as factors related to governance.

Findings indicate that critical mineral extraction can have significant positive impacts on local socioeconomic activity, particularly in areas distant from existing infrastructure and urban centers. The results highlight the complex role of institutional quality in mediating the socio-economic impact of mines, and shift attention to the underlying factors that shape institutional performance to deliver local benefits.