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1. No Time to Waste: Governing Cobalt Amid the Energy Transition

Author:
David Manley, Patrick Heller, and William Davis
Publication Date:
03-2022
Content Type:
Special Report
Institution:
Natural Resource Governance Institute
Abstract:
Cobalt is critical. Along with other critical minerals, cobalt has important economic uses and currently few viable substitutes, yet its supply faces a high risk of disruption. Manufacturers of batteries for electric vehicles (EVs) want the metal. EV sales—and likewise, cobalt demand— could grow a lot more. Yet, cobalt may not remain critical for decades to come. EV buyers, battery manufacturers and miners fear the high prices and disrupted supply, as well as human right abuses, environmental destruction, corruption, and political risk. As with other critical minerals, industries are seeking to use less of the metal. The time available for the Democratic Republic of Congo (DRC) and other countries to benefit from mining the metal may be short-lived. Good governance is therefore important both for people in mining countries and for humanity to meet the Paris Climate Agreement. This report aims to help governments and their advisors in mining countries, such as the DRC, derive value from mining cobalt, develop industry along the battery-supply chains and address a host of problems from human rights abuses to corruption. The report is also for policy-makers working to ensure that the world delivers enough cobalt in time for the global energy transition.
Topic:
Natural Resources, Energy, Green Transition, and Cobalt
Political Geography:
Africa and Democratic Republic of Congo

2. Measuring Extractives Dependency: Why it Matters and New Approaches

Author:
William Davis
Publication Date:
12-2022
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
When countries depend too heavily on extractive industries (extraction of nonrenewable natural resources) it can pose problems for their economies. These include: The volatility of natural resource commodity prices, which can cause shocks that are difficult for the country to manage The exhaustibility of natural resources and the challenges of replacing them as a source of income when they run out The political economy of governments relying on natural resources, which seems to make governments less effective (e.g., if they rely on resource wealth to fund themselves rather than developing other sectors of the economy) To address resource dependency, we need to be able to measure it. With this in mind, NRGI has produced a new dataset that builds on existing literature to provide a broad range of indicators of dependency on the extractive industries. This dataset is primarily for internal use by NRGI colleagues, but is also freely available to interested researchers. The aim of this dataset is to support a more multidimensional approach to understanding resource dependency, its causes and consequences. The related briefing explains the rationale behind the dataset and its various indicators, and some includes some initial insights based on analysis of the data.
Topic:
Natural Resources, Tax Systems, Data, Revenue Management, and Dependency
Political Geography:
Global Focus

3. Opportunities and Challenges for Senegal in Oil and Gas Production: Lessons Learned from Other New Producers

Author:
William Davis and David Mihalyi
Publication Date:
05-2021
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Senegal, with significant reserves of natural gas, appears to be on the verge of becoming a significant hydrocarbon producer. This resource wealth presents the country with opportunities, but also risks. NRGI's new paper reviews the recent experience of other “new producers”, mainly in Africa, and attempts to draw lessons for Senegal on how to make the most of its hydrocarbon resources, taking into account both the changing context due to the coronavirus pandemic and the ongoing transition to renewable energy. Countries face a number of challenges in managing revenues from natural resources. This brief focuses on some of the challenges affecting countries as they prepare for production from oil and gas finds. First, international experience has shown that a number of countries have succumbed to the “presource curse, where overoptimism regarding the future benefits from the sector undermines government policies and ultimately leads to disappointing outcomes. As such, it is important to manage public expectations around what the finds will mean for the economy, and resist pressure to embark on unsustainable borrowing, public spending or investment plans based on overly-optimistic forecasts of the revenues that will flow from these resources. There are also challenges around putting in place an appropriate governance framework to prevent revenues from being lost to tax avoidance/evasion and mismanagement. In the context of the coronavirus pandemic, these challenges are particularly difficult, as countries grapple with fears of losing out on investment, and weigh whether to use resource wealth to finance temporary spending needs to stabilize the economy.
Topic:
Oil, Natural Resources, Gas, Renewable Energy, COVID-19, and Revenue Management
Political Geography:
Senegal and Africa

4. Managing Senegal’s Oil and Gas Revenues

Author:
William Davis, Andrew Bauer, and Papa Daouda Diene
Publication Date:
12-2021
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
As of late 2021, Senegal is on the cusp of becoming a significant oil and gas producer. The revenues that it can expect to mobilize present it with an important opportunity to speed the country’s development by increasing public investment. In preparation for this, Senegalese authorities are currently revising the country’s framework for managing its oil and gas revenues, which remains a work in progress. The authors of this report evaluate various aspects of Senegal’s policy framework for managing oil and gas revenues and share recommendations as to how it could be strengthened.
Topic:
Oil, Natural Resources, Gas, and Revenue Management
Political Geography:
Africa and Senegal