Chinese companies are expanding worldwide, seeking to extract strategic minerals for the clean energy transition.
They are targeting Latin America and its lithium, cobalt, copper, and rare earth reserves.
Between 2018 and 2023, Argentina, Bolivia, and Chile will receive the most Chinese lithium investment, the US think tank Atlantic Council’s Latin America Center said in an infographic series released in early April.
“Mining companies are investing in the region because the resources available in Latin America are of high quality, have a good price, and are in demand in the Chinese market,” said Francisco Urdinez, associate professor at the Institute of Political Science at the Pontifical Catholic University of Chile.
“The interest in lithium due to the growing demand for the development of clean technologies for electric cars, the investments in iron in Brazil and copper in Peru are driven by the economic boom of the last 20 years.”
The race for green technology dominance, which emphasizes investment in mining strategic minerals, comes at a high environmental cost.
“The search for and mining of lithium should contribute to the energy transition and the fight against climate change,” Aleida Azamar Alonso, coordinator of the master’s program in sustainable societies at the Autonomous Metropolitan University of Mexico, told Argentine news site Canal Abierto.
“We need to pay attention to the whole range of resources consumed by this industry, its eventual waste, and the impact on the flora and fauna of the affected regions.”
The New York-based nongovernmental organization International Service for Human Rights and The Collective on Chinese Financing and Investment, Human Rights, and Environment (CICDHA), a workspace for a group of Latin American civil society organizations to implement an advocacy strategy and influence Chinese actors that impact the region, compiled information on 14 Chinese capital projects that affect the rights of regional communities.
Six of these projects are mining investments in Ecuador, Peru, and Colombia.
Sofía Jarrín Hidalgo, Ecuadorian activist and advisor to the nongovernmental organization Amazon Watch, told the environmental news site Mongabay Latam that three Chinese projects in the Ecuadorian Amazon are seriously affecting the environment and pose problems in respecting free and informed consent.
“It is important that there are formal and adequate complaint channels that allow companies and financiers to be held accountable, sanction abusive corporate behavior, and guarantee access to remediation and integral reparations for affected communities,” said Jarrín Hidalgo.
The CICDHA report shows that in Ecuador’s Zamora Chinchipe province, the Mirador mining project of Ecuacorriente, a subsidiary of Chinese state-owned companies Tongling and China Railway Construction Corporation (CRCC), is affecting at least 16 different ecosystems that are home to 4,000 plants and 400 algae species.
In Ecuador’s Morona-Santiago province, the San Carlos-Panantza mining project by Explorcobres, a subsidiary of the CRCC-Tongling consortium that exploits El Mirador, affects 1,200 families in 47 communities and impacts 70 percent of the ancestral territory of the Shuar Arutam people, the study said.
“After seven years of legal proceedings, the Ecuadorian Constitutional Court ruled that the socialization processes carried out by the mining company were not equivalent to carrying out prior consultation.”
“Therefore, it ordered full reparation for the Shuar people,” the report states.
The findings of the report were submitted to the United Nations (UN) Committee on Economic, Social, and Cultural Rights in February, with a request to recommend that China protect and comply with its extraterritorial obligations under the International Covenant on Economic, Social and Cultural Rights (ESCR Covenant) and other UN instruments signed and recognized by China in the context of projects with Chinese participation in Latin America.
“All of the projects studied are located in areas of high social conflict, high environmental and cultural diversity, especially in indigenous areas,” said in a press release Marco Antonio Gandarillas, who monitors Chinese projects for Ecuadorian NGO Latinoamérica Sustentable.
“The ESCR committee’s assessment is critical to the future of Chinese regional investment and financing.”
A common key factor in Chinese investments causing environmental degradation is the failure of existing regulatory systems.
And that’s an urgent issue that must be addressed to strengthen them.
“The states that receive these investments fail to control them appropriately. A phenomenon occurs in which the company is not willing to improve standards unless the state orders it to do so; if the state does not order it to do so, the standards are simply not met,” Urdinez said.
“The same companies can behave very differently in two countries, depending on the quality of regulation in the countries where the investments are made.”
According to the US Office of National Intelligence’s 2023 Annual Assessment Threat, China’s dominance in extracting and processing various strategic materials poses a threat.
“China could use its control of these critical mineral markets to restrict volumes and gain commercial advantage, or as a tool in a political or trade dispute,” the assessment states.
Continued disruption of Chinese-controlled supplies would lead to shortages that could affect West civilian and military manufacturing production.
However, export restrictions on critical minerals would likely accelerate efforts and coordination worldwide to develop alternative sources or substitutes outside China.