Transparency and Accountability in the Critical Mineral Supply Chain: A Global Call for a Fair Energy Transition
A surge in global demand for critical minerals has ignited a dual crisis: fragile supply chains and escalating socio-environmental risks. With minimal planning and weak bargaining power among producer nations, potential supply disruptions that could destabilize the global energy transition must be urgently addressed before rampant exploitation inflicts severe harm on communities and the environment.
According to data from the United States Geological Survey (USGS), global nickel production in 2024 is estimated at 3.7 million metric tons (MT), with Indonesia contributing approximately 2.2 million MT or 59.46% of total global output. Meanwhile, heavy reliance on certain mineral-producing countries within the supply chain further elevates economic and environmental risks that require systematic management.
A case in point is the production decline at PT Gunbuster Nickel Industry (GNI), one of Indonesia’s largest nickel smelters, processing 21.6 million tons of nickel ore annually. The smelter nearly ceased operations just months after its parent company in China, Jiangsu Delong Nickel Industry Co, went bankrupt. Since early 2025, PT GNI has shut down most of its production lines due to financial pressures from Jiangsu Delong’s aggressive expansion strategy in Indonesia. This situation highlights how substantial investments without sustainable planning can lead to severe consequences for the local economy, environmental degradation, and labor risks.
In response, several civil society organizations working on critical mineral issues have convened the International Conference of Critical Mineral-Producing Countries: Mobilizing for Justice and South-South Cooperation. Representatives from key mineral-producing nations—including Colombia, South Africa, Malaysia, Indonesia, and the Philippines—gathered in Yogyakarta on 21–22 February 2025.
The conference underscored the need to strengthen advocacy cooperation among Global South countries and to ensure that the global energy transition is both transparent and equitable. This is especially crucial given the long-standing negative impacts of critical mineral exploitation on the environment and local communities.
“Reflecting on the situation at PT GNI reveals a mismatch between the ease of smelter permits issued in recent years and the preparedness of mineral supply governance. Critical mineral-producing nations like Indonesia must impose a smelter moratorium to control supply and pricing in the international market. This moratorium can serve as an opportunity for a comprehensive review of all policies within the critical mineral supply chain,” said Bhima Yudhistira, Director and Economist at CELIOS.
Bhima further explained that factors such as excessively low nickel prices, the hollowing out of midstream industries, and heightened environmental risks have weakened the bargaining power of producer nations when negotiating with buyers in the stainless steel and electric vehicle sectors. “Strengthening cooperation among critical mineral-producing nations must incorporate principles of sound governance, sustainable industrialization, and support for stricter environmental standards, including a halt on increasing coal-fired power plants in industrial zones,” he stressed.
“We must forge an alliance to address issues stemming from critical mineral extraction—including poor working conditions, health hazards for local communities, environmental degradation, and unequal wealth distribution. This alliance should involve all affected groups, from farmers and indigenous peoples to workers and urban communities, who have borne the brunt of critical mineral exploitation,” added Jezri Krinsky from the Institute for Economic Justice, South Africa.
Despite the expansion of the mineral extraction industry, the environmental and social costs incurred by producing nations far outweigh the economic benefits. Many of the richest mineral deposits lie in ecologically sensitive and indigenous areas, where mining activities have led to deforestation, water pollution, and the marginalization of local communities.
“Mining in environmentally sensitive areas should not be allowed. The potential for irreversible damage necessitates a robust regulatory framework and a commitment to sustainable practices that truly embody the principles of environmental protection and public health,” stated Theiva Lingam of Friends of the Earth (FoE) Malaysia during a discussion session.
Transparency and Accountability in the Supply Chain
The conference called for transparent and consistent regulations to resolve contradictions in current policies, which aggressively promote critical mineral extraction for battery production while neglecting environmental oversight. Without decisive measures, global sustainability targets—including the goal of achieving net zero by 2045—risk becoming hollow promises.
Valentina Rincon, a representative of the Centro Regional de Empresas y Emprendimientos Responsables (CREER) in Colombia, emphasized the need for a platform that allows civil society organizations in Global South countries to share experiences, exchange information, and adopt best practices to strengthen advocacy.
“Through collaboration, we can fortify the human rights framework within the critical mineral value chain, promoting a governance model that prioritizes participation, accountability, dialogue, and justice in the energy transition—especially for communities most directly affected,” Valentina concluded.
Conference participants also stressed the urgency of enhancing corporate accountability and data transparency within the critical mineral supply chain. They demanded mandatory disclosure regarding the traceability of raw materials, funding sources, and the environmental impact of mining operations. Currently, only a handful of companies openly disclose the origins of their nickel, hindering effective oversight and regulation.
This call to action reinforces the need for a more equitable approach to managing critical mineral resources, ensuring that resource exploitation benefits not just a select few but also safeguards community rights and environmental sustainability in producing nations.
