S7 Ep51: The critical minerals scramble

King Leopold II of Belgium told his envoy in London that he did not want to lose his slice of "this magnificent African cake". The cake was the Congo Free State. Today the Democratic Republic of Congo holds 70% of the world's cobalt reserves, and so the cake is back on the table. Christopher Adam (Oxford) is one of the editors of a special issue of the *Oxford Review of Economic Policy* on the new scramble for critical minerals. The minerals lie mostly in the Global South, and the demand comes mostly from the North. In this week's VoxDev talk, Chris explains why a mining boom may create few jobs, why it might not last, and why hiring the best lawyers could be the smartest way to use an aid budget. The research behind this episode: Adam, Christopher, Rabah Arezki, and Frederick van der Ploeg. 2026. "The scramble for critical minerals." *Oxford Review of Economic Policy* 42 (1): 1-13. Open access. The introduction to Volume 42, Issue 1, a special issue on critical minerals. To cite this episode: Phillips, Tim, and Christopher Adam. 2026. "The critical minerals scramble.” *VoxDev Talks* (podcast).  **About the guest** Christopher Adam is Professor of Development Economics at the Oxford Department of International Development, University of Oxford. He is managing editor of the *Oxford Review of Economic Policy*, an associate editor of the *Journal of Development Economics*, a Lead Academic for the International Growth Centre, and a Visiting Scholar at the International Monetary Fund. His research spans the macroeconomics of low-income countries, monetary economics and public finance, and growth and structural change, including the response to climate change and natural disasters. **Research cited in this episode** **Leopold II and the "magnificent African cake".** The opening quotes a letter from King Leopold II of Belgium to his envoy in London, in the English translation used by Adam Hochschild in *King Leopold's Ghost* (Houghton Mifflin, 1998). Leopold went on to rule the Congo Free State as a personal possession. Chris uses the comparison to ask whether today's scramble will end any better for the people who live on top of the minerals. **What makes a mineral critical.** There is no single list. The usual working definition, from the US National Research Council (2008), is that a mineral must be both essential to a modern technology and subject to supply chain risk. In the same special issue, geologist Jon Blundy compares the critical mineral lists of 12 countries and finds that only lithium and the rare earths appear on all of them. **Demand to 2040.** The International Energy Agency (IEA 2021) projects that demand for minerals for clean energy technologies will rise at least fourfold by 2040 if the world meets its climate goals. Chris adds two further sources of demand, digital infrastructure and defence. **China's grip on processing.** Mining is spread across many countries; refining is not. China controls between 60% and 80% of final global supply of processed critical minerals (Leruth et al. 2022, cited in the paper). Chris argues this concentration is what makes the current scramble different from the earlier one for oil and gas. **The presource curse.** A term from World Bank economist James Cust and David Mihalyi (IMF 2017). Governments and citizens start spending in anticipation of a resource boom, before any revenue arrives, and growth can fall as a result. Chris warns against the same over-exuberance about local processing of critical minerals. **Battery substitution.** Lithium-ion batteries dominate today, but sodium-based alternatives are in development (Vu 2025, cited in the paper). High prices raise the incentive to find substitutes, so a producer country cannot assume today's price will hold. **Take-or-pay contracts.** In a take-or-pay contract, the buyer pays for a minimum quantity of output whether or not it takes delivery. The paper proposes such long-term contracts, used in natural gas, as one way to share the risk of technological change between mining companies and producer governments. **Taxing value that sits downstream.** In the special issue, Gregoire Rota-Graziosi argues that the rent from critical minerals is moving away from the mine and towards processing plants and intangible assets. His proposals include anchoring prices to international benchmarks to limit transfer pricing abuse. Chris stresses the role of royalties. **Indonesia's nickel export ban.** Indonesia banned exports of raw nickel ore from 2020. It is now the world's leading nickel producer and processor, but the paper notes that the main impetus came from Chinese firms and investment in industrial parks. Chris raises it as a success with a caveat. **The double dividend.** In the special issue, Mathieu Couttenier and Dominic Rohner argue that the green transition could reduce conflict as well as emissions, if governance, transparency and multilateral institutions are strong enough. Chris says he would like to share their optimism. **Dutch disease.** A resource boom drives up the real exchange rate and makes other exports less competitive (Eastwood and Venables 1982). Because mining creates few jobs, Chris argues that industrial policy beyond the mining sector must address this risk directly. **More VoxDev Talks episodes** No taxation without administration: What makes tax authorities work. Royalties and transfer pricing rules are only as good as the tax authority that enforces them. Rethinking development cooperation: The case for a 'balance sheet' approach. A proposal to treat low and middle-income countries as managers of their own assets, which is the position a mineral-rich government is in. **Related reading on VoxDev** Mining booms move workers from farms to services, not factories, by Qing Huang, Victoria Wenxin Xie and Wei You. Evidence from 33,262 mines on what resource booms do to local employment. Who owns the mine matters for deforestation, by Victoria Wenxin Xie, Wei You and Ran Goldblatt. Mineral price booms increase deforestation near mines, and investor origin changes the size of the effect. The downstream impacts of mines: How pollution hits agriculture, by Lukas Vashold, Gustav Pirich, Maximilian Heinze and Nikolas Kuschnig. In Africa, crops are less healthy downstream of mining sites.