Critical Materials for Development: A New Trajectory for Norwegian Foreign Aid Policy

Abstract

The war in Ukraine has accelerated the global shift to renewable energy. As a result, global mineral and metal sup- ply chains have also started changing in response to rising demand for materials for clean energy technologies. The scale of coming changes in critical material markets is unprecedented. By 2040, the energy transition will raise demand by more than 1,000% for lithium, cobalt, copper and nickel needed for the production of solar pan- els, wind turbines and batteries. Demand for germanium will rise by as much as 8,600%. Many of these minerals are located in poor and politically unstable developing countries in Africa and Asia, many of which are Norad partner countries. Most of these countries require targeted international aid to improve their extractive industries for the mining, production and supply of critical materials. Similar to the Norwegian Government’s Oil for Development (OfD) programme launched in 2005, Norad could devise a new programme, ‘Critical Materials for Development’, where the assistance provided to partner countries could be tailor-made to promote sustainable mining and improve local economic development in the short and long run. Moreover, Norwegian development agencies including Norad could consider joining existing global initiatives on critical materials and sustainable mining and provide financial and technical support in the form of co-finance and capacity-building schemes.

Critical Materials for Development: A New Trajectory for Norwegian Foreign Aid Policy