As mineral-rich countries race to capture greater value from their resources in the global energy transition, William Davis, Economic Advisor with the Secretariat to the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF), has urged developing economies to rethink their industrial strategies.
Speaking at a webinar held during the London Climate Action Week 2025 on the theme “Beyond Raw Exports: Leveraging Energy Transition Mineral Value Addition in Producer Countries,” Davis offered a sobering assessment of current trends and policy options and proposed a more inclusive path forward.
High-Income Countries Tighten Their Grip on Value Chains
Davis sounded the alarm, noting that high-income nations and China are investing heavily to dominate the processing and manufacturing ends of critical mineral value chains such as lithium, copper and nickel which threatens to marginalise resource-rich but lower-income nations. These investments span infrastructure, research and development (R&D), subsidies, and stockpiling, all aimed at drawing mineral value addition within their own borders.
“While China has long deployed industrial policy to build mineral manufacturing dominance, high-income countries like the U.S., EU members, Canada, and Australia have now followed suit,” Davis said. “The risk is that these countries extend their control over mineral-based industries, squeezing out opportunities for developing nations hoping to industrialise through mineral value addition.”
Trade Restrictions Alone Rarely Work
In contrast to high-income nations’ diverse tools, Davis observed that developing countries often rely on blunt instruments like export taxes, bans, or mandatory local processing clauses, strategies that frequently fall short.
“Policies like export restrictions are more a sign of policy constraint than strength,” Davis noted. “These tools are rarely effective on their own unless countries hold significant market power, as Indonesia does with nickel.”
Attempts to enforce local value addition through such mechanisms may deter investment or push buyers to alternative suppliers, ultimately undercutting mineral exports without spurring meaningful industrialisation.
Picking Priorities: Not All Value Addition Is Viable
Rather than doubling down on weak tools or attempting to out-subsidise wealthier countries, Davis urged developing nations to “choose battles wisely.” He advised governments to focus scarce public resources on feasible, high-impact value chain segments that align with domestic capabilities and priorities.
“It’s about asking three key questions: Is it feasible? Is it desirable? And is it the top priority?” Davis explained. “In many cases, other sectors like agro-processing or the assembly of imported components for local markets may yield greater industrial returns than attempting to build entire mineral-processing industries from scratch.”
He cited examples such as lithium-iron phosphate battery assembly for domestic electric vehicles or wind turbine component production as alternative paths to green industrialisation in Africa.
Level the Playing Field Through Equitable Partnerships
Davis pointed out the need for “equitable mineral partnerships,” a collaborative alternative to the current model of competition and unilateral trade restrictions.
Rather than turning industrial policy into a geopolitical contest, he called on richer countries to support local value addition in producing nations. This would not only advance shared climate goals but also secure critical mineral supply by strengthening the social license to mine.
“Supporting value addition in producing countries can actually reduce the risk of supply disruptions,” he argued. “Mining becomes more politically and socially viable when communities see real economic benefits from downstream activities.”
He further noted that many mineral-producing countries generate cleaner electricity than current industrial powers, meaning greener value chains could be built closer to the mine sites.
A Call for Transparency and Accountability
Although many high-level mineral partnerships have been signed in recent years between Africa, Europe, North America, and Asia , Davis criticised their vagueness.
“These agreements often lack detail on how they will promote local value addition,” he said. “There’s a transparency deficit that must be addressed if they are to meet their development and climate goals.”
Redefining Global Mineral Governance
Davis concluded with a stark warning and a hopeful vision. Without a course correction, the current trajectory risks entrenching existing inequalities in the global mineral economy, replicating a colonial model of raw material export with little domestic benefit.
But with deliberate choices, pragmatic prioritisation, and genuine cooperation between countries, a more inclusive mineral future is possible.
“The energy transition doesn’t need to be a zero-sum game,” Davis said. “We can do better, not by racing against each other, but by partnering more equitably.”
