Najib Saab
Secretary-General of the Arab Forum for Environment and Development (AFED) and editor-in-chief of Environment and Development magazine

Organization of Nickel Exporting Countries?

The Future Minerals Forum, recently held in Riyadh, carries important connotations in a capital that usually hosts energy conferences, as the largest oil exporting country in the world. In addition to being another proof of the seriousness in implementing policies to diversify the economy, this landmark event is a sign of proactive planning, after the importance of strategic minerals in the energy markets became evident. The conference discussed building a responsible global mineral sector that invests in natural resources for the benefit of development, while protecting the environment and ensuring sustainability, based on cooperation among countries, organizations and the private sector. The event has added importance because Saudi Arabia itself amasses promising mineral wealth.

This goes in hand with Saudi Arabia's involvement in playing a pivotal role in clean and renewable energy markets, from scientific research and development to global operation and marketing. This involves enhancing efficiency measures and carbon capture and storage, besides investments in the sun and wind as primary sources of renewable energy, and hydrogen as a reliable means to carry and store energy. Whereas in the past response to everything related to developments in energy sources outside the realm of oil and gas was suspicious and reserved, Saudi Arabia has now turned to engaging in new technologies and energy markets as a major player and strong competitor.

Shortly after the conclusion of the ministerial meeting that accompanied the Minerals Forum, the UAE hosted for the fifteenth time the Abu Dhabi Sustainability Week and the World Future Energy Summit. In addition to presenting the most important developments in energy transition, those assembled in Abu Dhabi discussed preparations for the upcoming climate summit (COP 28), which will be held at the end of the year in Dubai, and ways to reach practical results that go beyond wishes and good intentions. Simultaneously in Abu Dhabi, the thirteenth session of the General Assembly of the International Renewable Energy Agency (IRENA) convened last week, bringing together 1,500 officials from governments, organizations and companies, to review the progress made in the transition to clean energy, and to develop a technological and financial roadmap for the future.

If interest in clean and renewable energy is normal these days, within the scope of programs to reduce carbon emissions to fight climate change, what is the role of minerals in this regard?

Minerals are a key component in the manufacture of solar panels and wind turbines, as well as batteries that electric cars rely on. It is expected that nickel will be more used than steel in cars in 2040, in addition to lithium, cobalt, graphite and copper. As for silicon, it will remain the main metal component for the manufacture of solar photovoltaic panels, until alternatives similar in efficiency are developed. While the production of other strategic minerals is divided among several countries, in varying proportions, China controls the silicon market today, as it produces more than half of the global total, followed by Russia, the United States, Norway and Brazil, in much smaller quantities. The results of what was announced last week in Sweden, about the discovery of the largest deposit of rare earth metals in the north of the country, are not expected to show before ten years. The outcome may reduce Europe's dependence on China as a source of about 98 percent of its needs for strategic minerals, on which the future world economy will depend, for long. This is because renewable energy equipment and electric cars will need many times more minerals than conventional power plants. This explains the World Bank's projections that the production of strategic minerals will increase 500 times by 2050.

Reserves of nickel, the most important metal for manufacturing batteries, are concentrated in Indonesia and Australia, followed to a much less extent by the Philippines, Canada and Russia. As for the lithium reserves, which is as important as nickel in the manufacture of batteries, they are concentrated in South American countries led by Chile, followed by Australia, Argentina, China, the United States, Zimbabwe, Brazil and Portugal, in smaller quantities.

Indonesia has been working for years to protect nickel prices, by limiting the quantities extracted and exported, especially as rich consuming countries are still controlling the markets for this important metal, through multinational companies. These multinationals get nickel from source countries at low prices, and sell it on world markets at many folds higher. Indonesia is seeking to establish an Organization of Nickel Exporting Countries (ONEC), similar to the Organization of Petroleum Exporting Countries (OPEC), just as South American countries are also aspiring to establish a union for lithium producers, to protect their interests in the market and to prevent the exploitation of their natural resources at the lowest prices. However, the task of the two parties will not be easy, because nickel and lithium mining is still dominated by private companies that have exclusive long-term monopoly, rather than in the hands of the governments themselves, as in the case of OPEC countries. However, it is only natural for countries that produce strategic minerals, primarily nickel and lithium, to continue working to protect their national rights, either by not renewing concessions or resorting to international courts.

It is true that the minerals used to make batteries and solar panels are of strategic importance in energy security, but the monopoly of certain countries and companies, and the depletion of stocks, is not an inevitable destiny, because technological discoveries promise to provide alternatives in various fields, the first of which is the batteries. Experiments on sodium, which is extracted from seawater and land in form of rock salt, have reached impressive results because it is used as major alternative, not just an auxiliary element for storing electricity in batteries, especially those used for electric cars. Besides the fact that there would be no fear of sea water, the largest source of sodium, being depleted.

Metals used in solar panels, wind turbines, and batteries will, to varying degrees, remain essential components of the clean energy sector. Therefore, we should not be surprised if we ever hear, for example, of the establishment of the 'Organization of Nickel Exporting Countries', and our ears may have to get used to the sound of 'ONEC'. Oil exporting countries would do well to take these developments into account soon, as did Saudi Arabia in the case of the Riyadh conference on rare minerals. This is the best path which secures for those countries the role of major players, rather than being mere spectators from the sidelines.

Najib Saab is Secretary General of the Arab Forum for Environment and Development- AFED and Editor-in-Chief of Environment & Development magazine.