Michael Wurmser



A NATO for minerals & metals


I felt privileged to be asked to speak on not one, but two occasions at the recent United Nations Trade and Development expert meeting to discuss commodities, at the Palais des Nations in Geneva. During those speeches and in this article, I want to introduce you how commodity dependent developing countries can gain much more of the economic benefit from their natural resources – through strategic partnerships and alliances. This is already happening on a larger scale in the form of the Minerals Security Partnership (MSP), established by the United States and key partner countries in June 2022 to bolster critical mineral supply chains. Australia, Canada, Finland, France, Japan, the Republic of Korea, Sweden, the United Kingdom, the United States, and the European Union were the founding partners, with Norway joining in September this year.

I like to refer to this movement as a ‘NATO for minerals and metals’ – where every member should be a winner, thanks to the creation of strong, stable supply chains, in tandem with environmental and social sustainability. Let me go into a bit more detail…

No value at the start of the chain

Today, developing countries get little or no benefit at all from their natural resources; they’re often simply exported as raw materials. That means the economic value – or value creation – is captured elsewhere, in developed industrial nations. There is no value where the supply chain originates. And so, developing countries are left behind, or can only move forward at a glacial pace – because they lack the enablers of development. And by this, I mean capital, technology, knowledge transfer and skills. This is blatant subjugation.

Bolstering at the source

But there is another way. Instead of just being places from which raw materials are being extracted and exported, developing countries should process the materials themselves, in situ. This would move them up the value chain, significantly – for example in battery production. I call this vertical value creation. Of course, the evolution of natural resources industries needs to be in line with the UN Sustainable Development Goals – but done ethically and responsibly, it would help developing countries strengthen their economic – and therefore political – stability. For more developed nations, it has the commercial benefit of improving the resilience of supply chains.

Quid pro quo

This notion of vertical value chains can very realistically be achieved – but only through cooperation, collaboration, and strong partnerships. Europe, for example, needs resources that can’t be found on its shores. Cobalt and copper spring to mind. But if the relationships aren’t sufficiently strong to guarantee the arrangement, then the chain is easily broken – leading to shortages; Europe’s current energy crisis is testament to that.

If western industrial nations were to commit to certain, let’s say, resource-rich African states, and pledge development commitments, those states would be given a much-needed leg-up the ladder. And they’d become a more valuable link in the chain – with greater potential to not just mine minerals, but process materials and then create the finished product. Entire EV batteries, not just the cobalt, for example – therefore positioning those countries vertically within the value chain. Interestingly, at the US’ Mineral Security Partnership convention in September, the following countries were in attendance: Argentina, Brazil, the Democratic Republic of the Congo, Mongolia, Mozambique, Namibia, Tanzania, and Zambia.

An 18th SDG?

I’ll end on a bold suggestion: could the 18th UN Sustainable Development Goal be ‘Vertical Value Chains’? In this way we can boost geo-security, prosperity, and sustainability – just as the NATO for minerals and metals does. Together.

Watch both UN speeches here