“Development bank-backed transition minerals projects are frequently associated with significant environmental, social, and human rights risks.” This is the conclusion of the latest report by the International Accountability Project (IAP), an international advocacy organization.
IAP analyzed 77 projects globally, approved between 2023 and 2025. The analysis resulted in the Transition Minerals Finance Tracker, an interactive online database documenting transition minerals projects. It reveals that more than half of the projects analyzed, and nearly three-quarters of African projects, show evidence of actual, probable or potential harm to local communities.
“There are many companies that are multinational mining corporations who have a very bad track record in terms of human rights, yet they do get loans from the development banks,” Vaishnavi Varadarajan, program coordinator at IAP, told Mongabay in a phone interview. “It is raising the question of the due diligence that is being done by the banks beforehand.”
Since the Paris Agreement in 2015, a growing number of countries are investing in renewable energy sources such as solar and wind power as well as electric vehicles to limit their greenhouse gas emissions. Such technologies require components made from minerals and rare earth elements that are often found in the Global South and shipped to the Global North for value-added processing, Varadarajan said. “[I]t is kind of reinforcing a colonial way of extraction.”
The report denounces an unfair transition, in which countries financing extraction reap most of the economic benefits, while countries where raw materials are located face water depletion and contamination, forced displacements, deforestation, criminalization of land and environmental defenders, and human rights violations.
Elias Jika, program coordinator for Africa at the IAP, told Mongabay that many projects “started out with like ‘Oh, let’s end poverty!‘ But at the end of the day, the motivations of most development banks are profit-related.”
“We are fighting for them to put safeguards in place, to require government social impact studies to be done, to require mitigation measures,” Jika added.
Among the projects financed in Sub-Saharan Africa, three-quarters are for extracting cobalt copper and nickel, which are all used for renewable energy. Roughly 44% are with support from the U.S. International Development Finance Corporation (DFC), the American development bank.
“The DFC has over time increased its presence and interest in the African region. As you know China owns the majority of transition mineral projects, they dominate the market. The U.S. government is trying to compete with China. So, banks like the DFC and the IFC [International Finance Corporation — part of the World Bank Group] are increasingly financing transition mineral projects,” Jika said.
Mongabay contacted the DFC to learn more but did not receive a response by the time of publication.
Banner image: of destroyed crops along the Chambishi Stream in Zambia after a mining spill. Image courtesy of Southern Africa Litigation Center.
This story first appeared on Mongabay
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