Episode 388: The Truth About How Critical Minerals Work with Lisa Sachs

What do lithium batteries, Apple Watches and artillery shells have in common? They all trace back to the same tangled web of mines, minerals and geopolitics. In this episode of the International Risk Podcast, host Dominic Bowen sits down with Lisa Sachs, Director of the Columbia Center on Sustainable Investment at Columbia University’s Climate School, to unpack why critical minerals have become the defining resource story of our time. Drawing on two decades of advising governments and investors on resource governance, Lisa explains why the “resource curse” persists even as demand for lithium, cobalt and rare earths explodes, and why she believes the clean energy transition offers a genuine second chance for mineral rich nations to capture more value at home. The conversation ranges from a controversial Kazakhstan tungsten deal with ties to the Trump family, to the legalized corruption embedded in global mineral value chains, to why AI and climate change may be the biggest risks of all, not because we lack solutions, but because we’re too often not awake to them.

Episode Transcript:

Dominic Bowen: For decades, we’ve tended to think of mining and extractive industries as something that happened somewhere else — something that wasn’t relevant to us, something underground, in remote parts of Africa or South America or even Central Asia. But that’s simply not true, because the minerals extracted today determine who can build electric vehicles, who manufactures semiconductors, and who dominates artificial intelligence — not to mention equipping modern militaries and geopolitical power.

I’m Dominic Bowen, host of the International Risk Podcast. Joining me today is Dr. Lisa Sachs. She’s the director of the Columbia Center on Sustainable Investment at Columbia University’s Climate School, and for years she’s been advising governments, international organizations, and investors on resource governance, sustainable investment, and how countries can transform natural resources into long-term prosperity, not just instability. Lisa, welcome to the International Risk Podcast.

Lisa: Thank you so much, it’s so nice to be with you. As I’ve told you, I appreciate your saying how visible these minerals are in the mining sector, because for those 20 years, they’re everywhere — in the computer we use, our phones, they’re in the houses we live in, they’re in the electricity we consume every day. But as you’ve described, most people don’t think about all of those things around them in terms of the minerals — where they’re produced, and the geopolitics and economic implications of their production. That’s really consumed me for two decades, and it’s a pleasure to talk to you about it now.

Dominic Bowen: Thanks Lisa. I know you travel a lot, you lecture at universities around the world, and you’re a lifelong learner. Where are you today? What are you doing?

Lisa: That’s right, because we’re in global value chains, actually. I always believe we need to really understand things — we need to go and see, and talk to those in the countries that are shaping the world we live in. So I’m on the other side of the planet from my home right now — I’m in Hong Kong. I’m here in Asia for five weeks, mainly at the Hong Kong University of Science and Technology, having a wonderful time learning about the maritime sector and other aspects of the evolving energy system. Then I’ll be spending time in China and Southeast Asia too.

Dominic Bowen: Energy, critical minerals, and maritime are all such important conversations. Really important.

Lisa: I think they share, first of all, that they’re deeply interconnected, because we transport the minerals on shipping cargo, and to produce energy — consuming energy and then producing energy for the world all over.

They’re deeply interconnected, but they also share the quality you describe of being deeply international, complex sectors that are shaped by, and shape, the economies we live in and geopolitics. For many people who don’t study or see them, they don’t think about them often — until, say, there’s a closure of a strait. Then all of a sudden you see how profoundly we’re affected.

In reality, all of these corridors — mineral corridors, mineral value chains, shipping corridors, and energy systems more generally — are deeply interconnected. They’re very global, very complex, and they both shape and are shaped by our world order. So I find them all incredibly important to understand and to try to improve, so we can live in more sustainable, peaceful communities — a world community.

Dominic Bowen: It’s a great objective. Of course, we’ve all learned about the Strait of Hormuz, but there are many other critical points — the Strait of Malacca, the South China Sea, right across the Indo-Pacific region. There’s so much I think we all need to learn a little bit more about.

Recently I’ve heard some analysts — in The Economist, on Bloomberg — make some great predictions and analysis around critical and raw materials. One comparison I’ve heard is that they’re the 21st century’s equivalent of oil. But I’m not sure that’s actually correct, because I think these critical minerals underpin not just energy, but also artificial intelligence, military power, advanced manufacturing, and economic sovereignty. Where do you sit on that comparison between raw materials and the equivalent of oil in the 21st century?

Lisa: Funny timing — wonderful timing, actually — because you and I have been exchanging for quite some time, and just this week I published a brief reflection marking almost exactly the 20th anniversary of my working in this sector. It’s also the 20th anniversary of the Natural Resource Governance Institute, a wonderful organization that’s been working on natural resource governance for 20 years. As part of their anniversary series, I wrote a reflection.

What’s remarkable, to your point, is that we’re hearing about critical minerals now as if they’re new — dominating the media and our discussions of relevance to our economy. But those of us who’ve been working in this hard for 20 years are saying: these have always been central to our economy.

Before the Sustainable Development Goals were finalized, some colleagues and I wrote a public memo to the UN Foundation and General Assembly saying mining is at the heart of all of the Sustainable Development Goals — natural resources should be reflected in the sustainable development agenda. So I agree with you completely. They’re everywhere. I don’t think this is new. They’re part and parcel of our energy, our defense, alas, our technologies, and so on — spread throughout our economies.

Dominic Bowen: They’re everywhere, and I don’t think we all draw the link between many of these minerals and what they actually mean for us day to day. A little bit of a side note — I’ve started beekeeping recently, and it’s such a wonderful hobby. Once you get into it, you realize how amazing bees are and what they do for the environment. I was talking to a professional beekeeper who has about a thousand beehives, and the bees produce several hundred, if not thousands, of kilograms of wax every year, which he sells in big blocks.

I assumed he’d sell it to candle makers, but he actually sells it to defense companies — companies making ammunition, because the end of the ammunition is covered in wax. You don’t necessarily draw the link between these beautiful creatures, bees, and bombs. I think it’s the same with lithium, cobalt, nickel, copper, graphite, tungsten, and other rare earths — probably the last time many of us considered them was high school. But these are so important today.

What do CEOs, business leaders, and board members listening today need to understand about these raw materials?

Lisa: First, what you describe is, alas, profoundly true across a lot of sectors in our economy, where the defense sector drives so many decisions and is the consumer of so many technologies. We have a lot of technological advances because of the military — batteries and so on are also advanced in part because of their military applications. I regret that; I don’t like their use in the military. I think we should be producing materials for the peaceful societies we want to live in, and ensure they’re extracted and governed peacefully. But they are indeed important to the military.

What’s interesting is even the name “critical minerals” — that’s mainly derived from how we’ve classified certain minerals as critical for defense. But many of us in the field refer to critical minerals as those critical for clean energy technologies, for batteries, and for the component parts of the future clean world we want to live in. So we’re co-opting that name for the world we want to live in.

But the basic answer to your question is that they’re critical for all sorts of applications in our economy. What makes them so profoundly complex, but also important, is not only their end use, but where they’re extracted from, how, and who is affected by that extraction — where they’re processed, how they’re transported, who captures the value, where they’re produced, and who gets the final product. That is profoundly important. Unequal, poorly governed, it’s the source of a lot of conflict. Done properly, it could be the source of great stability and peace. That’s been what I’ve been working on for two decades.

Dominic Bowen: I think that’s so important. As governments race — and they really are racing — to secure critical minerals, there are risks becoming much more obvious to many people: corruption, political influence, environmental damage, community resistance, supply chain coercion, and competition between major powers.

Many of our listeners, when they hear “resource governance,” might think about environmental regulation and mining permits, which is part of it. But from what I’ve seen visiting mines in Sudan, in the DRC, in Pakistan, or oil fields in Syria and Iraq, and speaking with local stakeholders, governance really determines whether natural resources become a blessing or a curse. When you use the term “resource governance,” what does it mean in practice? How do we ensure that a mine in Balochistan, Pakistan, or an illegal gold mine in the DRC or Sudan, is governed well? What should we understand from that term?

Lisa: Excellent question. First, the way you describe how we see things myopically — I find that really true. Even the narratives we grow up with often portray just a slice of a picture. Unless you try to look beyond the limits of what you know and think you know, you miss a huge part of the story. That’s an important lesson for all of us — to think about what we don’t know, and what we might not know that we don’t know.

But you’re absolutely right that governance is what shapes whether natural resources lead to sustainable development. That’s what brought me to law school — literally, that was my question: this must be a question of governance. But almost immediately working in the field, I realized governance is critical, but I also needed to understand the power, the water, the transport, the communities, how communities were affected, where they got their healthcare, what their jobs would be in the future — and that’s a public investment program. Where was the public sector getting its funding? Could they borrow affordably? What was the role of development partners, the companies operating there with subsidiaries all over the world paying profits into tax havens?

I realized: this is bigger than governance. This — the natural resource sector, how its value is created and divided — is really part and parcel of our international financial architecture, of geopolitics, of environmental considerations. Understanding that holistically is absolutely critical, because otherwise we risk looking at these challenges myopically, thinking we understand a problem when we don’t.

Maybe I’ll end by saying the way we understand risk in this sector is reflective of that narrow lens. From any one vantage point — companies, the financial sector — risk is understood as one sliver. They see community unrest and think, “that’s a risk, here’s how we’ll address it,” when really the community unrest, the environmental risk, the climate risk, the financial risk, the technology risk are all interrelated in this complex system. Understanding the complexity is core to understanding and managing the risks.

Dominic Bowen: History is full of countries blessed with extraordinary natural resources that still stay poor, politically unstable, and deeply unequal. Economists call this the “resource curse,” which is a nice title and kind of makes sense. But trying to explain it to people — I’ve had this conversation many times with my son coming back from different countries — it’s hard not to give throwaway or blanket lines. Can you explain why some countries transform natural resources into prosperity while others end up trapped by corruption, instability, and generational conflict?

Lisa: I’m so glad you asked — here’s my ten-hour lecture on natural resources! No — you’re absolutely right that it should be a blessing. I’d say the concept of the “resource curse” itself is a relatively narrow concept — it refers to whether export dependence on natural resources crowds out other productive sectors.

But the more general reality is that the blessing of having huge natural resource deposits should translate into value for society — the goal is to translate subsurface natural resources into human capital, physical infrastructure, and well-being. That hasn’t happened to the extent we’d expected.

I have to tell you honestly: this 20-year mark has been a reflection point. I’ve spent 20 years developing increasingly sophisticated tools, frameworks, and trainings, thinking it’s a matter of better governance in contracts, a better fiscal regime, shared-use infrastructure, managing community benefits, thinking about where processing happens — believing that if we developed the right playbook for natural resource governance, we’d see better societies. The reality we need to grapple with is that 20 years later, we are not seeing those benefits. I struggle to name many mining communities at all that are better off for having mining. That’s a harsh truth. Countries blessed with natural resources remain deeply impoverished. The fact that we’re asking the same questions now about critical minerals, back in the headlines, is an indictment of what we’ve accomplished.

The conclusion I draw is that it’s not really about the governance of the mine. It’s — and this is what I wrote this week — that the failure has been treating natural resource governance as a field unto itself, rather than recognizing its deep entrenchment and interconnection with geopolitics, international finance, poverty in general, and the challenges of public investment and other aspects of global value chains that shape a state’s ability to translate those natural resources into prosperity. Twenty years on, we’re still learning, and it’s ever more important that we reflect so we can do better for the next 20 years.

Dominic Bowen: Looking at the next 20 years, there’s a bigger development agenda — the energy transition. This is often presented as unquestionably positive, but replacing fossil fuels with batteries, wind turbines, and solar panels still requires enormous quantities of minerals that have to be extracted from somewhere. Are we at risk of solving one global problem while unintentionally creating another, or is it still a positive story?

Lisa: I think it’s a profound opportunity, and some of the shifts are very positive. Here’s why: you’re right that the whole clean energy economy — the technologies themselves (solar panels, wind turbines, batteries, electric vehicles, other transport), but also buildings and other networks — are all mineral-intensive. That makes the challenge, and the imperative, of extracting and processing them properly, in a way that preserves the sustainability of our planet while allowing extracting communities to benefit, even more profound.

But here’s why I see it as an opportunity: what has always defined this sector is that raw materials themselves have very little value — the value is added in processing and in the products produced. But that processing happens where there’s affordable energy and where the markets are, which has rarely been near where the raw materials are extracted. That’s been the story of natural resource extraction from the DRC, Mozambique, Indonesia, Latin America — raw material extracted and exported to be processed elsewhere, with reliable energy, and produced for markets abroad.

What’s changed now is that affordable renewable energy in these countries makes processing near the mine increasingly feasible. These countries now also have markets for batteries and energy technologies, so the markets are closer too. So we have another bite at the apple — a new opportunity, not guaranteed to be better, but with more factors aligned to think properly: how can we extract resources, process them in the regions from which they’re extracted, capture more value, and develop the component parts of a competitive clean energy economy in regions like sub-Saharan Africa, Southeast Asia, and Latin America — regions that have been poor partly because they haven’t had these materials and opportunities. That’s the new opportunity enabled by clean energy technologies and more affordable energy worldwide.

Dominic Bowen: It’s very easy for us to throw mud at weak institutions — the Assad regime in Syria, corrupt officials in the DRC, conflict-affected parts of Mali. But I don’t think these resource governance issues are confined to countries with weak institutions. There’s been recent reporting in the New York Times, and I believe the Washington Post too, examining a major tungsten project in Kazakhstan that could receive up to $1.6 billion in US government support. The companies and investment vehicles involved are reportedly linked to Donald Trump Jr., Eric Trump, and the sons of US Commerce Secretary Howard Lutnick.

To be fair, the families have disputed any suggestion of impropriety, and the Trump sons have said they’re just passive investors. But I think this case, wherever you sit and however much weight you place on it, raises a larger governance question. Regardless of the country — when a government identifies a mineral project as strategically important (as the US does around the world), helps negotiate access (as embassies do), and provides substantial public financing to support national interests — should the families of the president or senior officials be permitted to hold financial interests in those companies? What does this case tell us about conflicts of interest, political capture, and the safeguards needed in this sector?

Lisa: Dominic, those are really thoughtful reflections. You’ve reminded me of one of my most naive, but humorous-in-hindsight, moments. When WikiLeaks came out — I was finishing college, or maybe early in grad school — I was already interested in the extractive sector, and I saw memos from embassies describing the pressure they were putting on foreign governments on behalf of US companies. I thought I’d unearthed something: “Can you believe these embassies are pressuring countries to respect bad contracts?” Of course — as you just said — that is literally what embassies are there to do: defend US interests at all costs. That is what shapes so many of the outcomes we see, the contracts that are formed and how they’re formed.

Something that wasn’t in the New York Times, but that I read on social media just within the past week, was an outgoing speech from the US ambassador to Zambia criticizing the Zambian government for corruption and mismanagement. A Zambian official — I believe from the Ministry of Foreign Affairs, though I don’t recall exactly who — responded, in essence: “You’re not telling the full story. We didn’t conclude the health deal you were offering because you were tying it to mineral rights, making it contingent on access to mineral rights.” He said it plainly.

Those are just a couple of stories — three, if you count mine — that show the tip of the iceberg of the geopolitics of the natural resource sector. And even short of that level, the Paradise Papers and Panama Papers revealed all sorts of structuring — worth reading if you haven’t. What’s remarkable is that it’s hardly even illegal to move a country’s domicile from one jurisdiction to another before concluding a mineral deal, because it reduces the tax burden. So a lot of this is legalized corruption — but it’s still corruption.

We often say the DRC is so corrupt, Zambia is so corrupt — that’s the narrative we’re told. But this is the geopolitical reality: those countries have their hands tied in many ways. They’re poorer, they can’t borrow as easily as developed countries, and they’re dependent on the framework set by developed countries — who effectively say, “give us this, or you don’t get your health budget.” That’s the real corruption in the sector.

Dominic Bowen: I totally agree. Another area I’d like to explore is resource nationalism. Quick reminder to listeners — if you prefer to watch, the International Risk Podcast is on YouTube, so please subscribe and like. It really matters for our long-term success.

Lisa, governments increasingly want not only to extract minerals but to refine them and manufacture high-value products, retaining more economic value at home, which is understandable. But as we see less globalization and more home-shoring, near-shoring, and friend-shoring — is this a threat to global markets, or a rational correction to what’s been an unequal value creation around the world?

Lisa: Excellent and timely question. It’s somewhat frustrating to see the narratives around resource nationalism. One of my favorite pieces — a chapter I co-wrote back in 2012 or 2013 — looked at claims of resource nationalism at that time too. Resource nationalism is used as a catch-all term, not just for nationalization of mines, but for wanting to capture greater benefits or protect a country’s interests vis-à-vis a foreign investor.

Back then, investors claimed that if countries tried to capture more value, they’d leave and nobody would invest again. We documented those claims, then looked at the Fraser Institute Index of Investor Attractiveness to see what actually happened. The short summary: as long as reforms were reasonable — and often they were, since countries were just trying to capture value rather than watch it all get exported — investment didn’t leave. That still holds; we’re still finding resources invested in all over the world.

So: is it reasonable for a developing country to want to capture value from its resources? Yes, very reasonable. Is it equally reasonable for developed countries like the US and Europe to be scrambling to secure their own value chains for critical minerals? I think that’s actually self-defeating — it leads to a zero-sum fight over resources, when the right thing, as so often on this planet, would be to learn to live together. How can we ensure everyone has the materials they need for clean energy systems and industries? And if we could live peacefully, we wouldn’t need as many materials for militaries in the first place.

So the obsession with near-shoring or capturing one’s own value chain isn’t as rational as a resource-rich country wanting to capture value from its own resources. Understandable as a mindset, maybe, but not smart — it leads to fighting, corruption, and bad deals. There’s no happy ending to that kind of scrambling.

Dominic Bowen: Many business leaders have fantastic insight and do real due diligence on social, development, governance, and geopolitical issues when looking at new markets — but that’s not the case across the board. A lot of business leaders still underestimate how quickly political risk can emerge. One day it’s an operational issue, the next it’s escalated to the board as a reputational issue.

I was recently working with a consortium of companies investing in a mine in a conflict-affected, disputed part of the world. The risks were severe — not just security risks, but insurgency, terrorism, community opposition, water issues, significant environmental issues — and there was geopolitical pressure from other nation-states pushing the consortium to go ahead with the deal. When you’re advising companies, what are the top indicators you look at — beyond social instability, political instability, and corruption?

Lisa: Excellent observations. One thing I keep noticing — and I shouldn’t find it surprising this far into my career, but I still do — is that there’s no actor in the system looking out for the system as a whole. We’re just not designed to. Every actor, every company, is optimizing within its own sphere, which is rational, but ultimately damaging and self-defeating, because you miss the broader effects. That’s not to say it’s easy for companies to look out for the world — they have shareholders and political pressures too. But the reality for all of us as citizens is that when every entity optimizes only within its own sphere, that’s what creates the profound risks and instability we face, because water, peace, and value are only optimized when we think about the whole. We’re on one planet.

When we work with companies — and I should say, we don’t advise from a business-interest standpoint, though we do work with mining companies all the time; Vale, the Brazilian mining company, was our center’s first partner about 18 or 19 years ago, when we were even called the Vale Columbia Center on Sustainable Investment because of a founding grant — our engagement has been about how risks can be managed by doing better in those contexts. Not by bringing in armed military when there’s social instability, but by understanding why: social instability exists because communities aren’t benefiting, or object because the costs outweigh the benefits. That’s not an easy problem, but at the very least, understand the local context — the development challenges — and think about how you can do better.

My whole career has been about thinking with companies: if you’re developing power for your mine, how can you develop it in a way that expands power access and affordability to the region? How can your mine contribute to the region’s development challenges?

One last example, of what not to do: I saw incredibly biased reporting on a mining project in Panama by First Quantum, where there was social conflict. The mining company’s quotes in the Financial Times at the time were incredibly naive — saying to communities, in effect, “how do you not understand that the materials under your soil are important for our Apple Watches and iPads?” How silly, how dismissive. The result of community opposition was that the mining company then brought a huge lawsuit against the government for not pushing the project through over that opposition — because that’s the power dynamic: when a community opposes a mine, the company can sue through international dispute settlement, a mechanism I’ve also spent 20 years studying.

I wrote publicly that this misrepresented the dynamics. The communities were right — what value were they actually getting? Not the iPads and Apple Watches. Suing the government because communities are seen as “wrong” isn’t the way to solve conflict. That’s why we keep seeing the same patterns: “why don’t they like our social programs, we built them a soccer field, a hospital, why?” It’s important for mining companies — and for the rest of us who vote and engage — to understand why communities removed from the capital, without access to energy, with their own cultural heritage, might not want a mine whose value accrues to a capital city and gets exported to produce Apple Watches for northern markets. We need to think about how to properly address that, so we can get the materials we want — I want those technologies too — while ensuring the value stays with those most affected by the mining.

Dominic Bowen: Very valid. There’s so much optimism around electrification and the clean energy transition, and even around AI, though that’s a bit more mixed. When you look around the world and travel, what international risks concern you most?

Lisa: A lot of risks consume me, but honestly what concerns me most is how illogical we are in addressing them — because we actually have the capability, know-how, and technology to do better than we do. That concerns me more than the risks themselves: that we’re not thoughtful about how we solve them.

I recently taught a class on climate change to my eighth-grade daughter’s science class, explaining new ways of thinking about these issues that adults often don’t grasp. The eighth graders got it instantly — of course you can think about different ways of producing energy. I realized: the kids get it at this age. Let’s hope they can inherit this world, because it’s the adults who don’t.

So, the risks: climate risk is very serious — it’s here now. Everywhere I travel I feel it every day; the typhoons right now to the north of China, for instance. This has intensified within less than a decade, and it’s going to keep intensifying, and these aren’t risks we can easily adapt to. What frustrates me most is that we know how to decarbonize the global economy — we have the pathways, the technology, the capital — but our approach is so wrongheaded. That’s been a big part of my work, and to me it’s the bigger risk: are we really going to get this so wrong out of confusion, when we could address it?

On AI and mining — inequality has been one of my motivations for my whole career. We have so many resources on this planet, so much technology. How do we accept that hundreds of millions of people don’t have access to energy? I read the book Everything Is Tuberculosis — we can now basically prevent and treat tuberculosis, yet hundreds of thousands still die because they live in developing countries. Why do we tolerate that?

I worry AI could exacerbate that inequality when it could instead ameliorate it — the ability to access and process information quickly could be mobilized for real good, bringing energy systems and technologies to parts of the world that don’t have them yet, helping them leapfrog. But will we ensure that happens? Or will the benefits accrue mainly to the trillionaires, which is what seems to be happening? So I’d say the risks are inequality, AI, and climate — but the biggest risk is that we’re not awake to the solutions that are right in front of us.

Dominic Bowen: I often say risk and opportunity are two sides of the same coin, and you’re right — the huge risk is that we don’t realize the opportunities we already have, and we leave them on the table, unutilized. Lisa, thank you for explaining all of that, and thank you for coming on the International Risk Podcast today.

Lisa: I think you’re part of the solution, actually. As I mentioned, I’m an avid podcast listener — that’s really how I get my information, because I think the way to overcome that risk of how we think about these things is to always try to understand new things, to recognize the limits of what we understand, to consider different perspectives, and not just accept conventional narratives. I don’t even read mainstream news anymore — I know it’s just intentional or unintentional slivers of the story. I listen to podcasts to hear from people who’ve thoughtfully considered these issues — “oh, that’s an interesting way to put it, that’s different from what I’d heard.” So thank you for what you’re doing, bringing perspectives from so many experts across so many areas, so we can think differently about the world and build shared conviction. I hope we can do better by understanding these risks, and become more capable, empowered citizens creating the world we want. I’m grateful for the work you’re doing to help bring us together.

Dominic Bowen: Thanks very much, Lisa. That’s actually why we created the International Risk Podcast. I’m a management consultant — my average week is 60 to 80 hours of work, and I’m always looking for ways to reduce my schedule. Occasionally I think about cutting the podcast, and then I think: no, there’s no way — we’re going to keep doing this, because it’s so valuable. I don’t agree with every guest we have on, and I definitely don’t know every topic we discuss, but having these conversations is incredibly valuable, and I think that’s what our listeners like too. It certainly helps me, and I’m sure it helps them.

Lisa: Especially when you don’t agree — that’s even more reason to listen and engage. So you’re doing the right thing, and it benefits all of us. Thank you so much, and thank you for inviting me to join you.

Dominic Bowen: Thanks, Lisa. That was a great conversation with Dr. Lisa Sachs, director of the Columbia Center on Sustainable Investment at Columbia University’s Climate School. I’m Dominic Bowen, your host — thanks very much for listening today, and we’ll speak again soon. Lisa, that was awesome — a tremendous episode. Thank you so much.