The Energy Transition Has a Blind Spot, and It Starts at the Mine
By Nicholas Vafeas
Published 8 April 2026
At a Glance
The Core Problem: Global energy transition policies rely on the assumption of highly coordinated, traceable, and centralized upstream material flows. In reality, a vast portion of critical raw materials (specifically lithium, tantalum, and niobium) are extracted from highly fragmented, informal LCT (lithium-columbite-tantalite) pegmatite systems throughout regions like the Alto Ligonha field in Mozambique.
The System Failure: Western compliance, ESG, and due diligence frameworks are built for a corporate supply chain version that only exists on paper. In the field, these multi-element deposits produce a dual economic system. While raw ores move slowly toward formal industrial export processing, high-value gemstones are instantly identified at the extraction point and diverted into highly discreet, informal cross-border trade networks. Because this parallel economy acts as a vital socio-economic pressure valve for communities facing deep systemic poverty, top-down regulatory interventions or digital tracking systems designed to "close" informal flows fail to solve the issue; they merely adapt, relocate, or aggravate local socio-economic instability.
The Solution: Policymakers and industrial enterprises must abandon simplified compliance narratives and proactively manage supply chain complexity through multi-layered strategies. Building genuine resource security requires moving beyond isolated technical or regulatory "fixes" and designing frameworks that actively integrate subsurface mineralogy with local economic incentives, cross-border trade realities, and community-level livelihood architectures.
A specimen of rough, gem-grade pink lepidolite extracted directly from local workings, the immediate byproduct of multi-element LCT pegmatites that drives a parallel, informal economy alongside industrial mineral extraction.
Deep in the jungle of northern Mozambique, far from boardrooms, policy frameworks, and ESG reports, a small mine is quietly feeding the global energy transition.
It doesn’t look like much.
A handful of pits carved into weathered pegmatite. Informal processing. A constant movement of people, ore, and less visibly, value. But what comes out of this ground matters: lithium, tantalum, niobium. Materials that sit upstream of batteries, semiconductors, and advanced technologies.
This is an LCT (lithium–columbite–tantalite) pegmatite system, part of the Alto Ligonha field. And it is not alone. Hundreds of similar operations are scattered across the region and extend into Malawi and Tanzania, each contributing (often invisibly) to global supply.
We tend to think of critical raw materials in terms of large, industrial-scale operations. Flagship mines. Strategic projects. National priorities. But much of the system doesn’t operate like that. Instead, it looks like this mine. Fragmented, informal, and embedded in local realities.
A value chain that splits in two
At first glance, the material flow analysis of this mine is straightforward. Ore is extracted, processed, and eventually enters global supply chains. But a closer look reveals something more complex.
Conceptual Material Flow Analysis of a Lithium-Columbite-Tantalite pegmatite from the Alto Ligonha pegmatite field, Mozambique
These deposits don’t just produce critical raw materials, they also host high-value gemstones. And this creates a dual system that begins almost immediately at the point of extraction.
One stream follows the expected path, i.e. ore moving (often inefficiently) towards processing and export. The other is faster, more discreet, and far harder to trace: gemstones identified early and diverted into informal or illicit trade networks. From a purely analytical perspective, it’s obvious to frame this as “leakage”. A problem to be fixed. A gap in governance. But that interpretation misses something quite fundamental.
The system behind the system
These mines don’t exist in isolation. They sit within communities facing deep socio-economic challenges. Poverty, limited access to education, few formal employment opportunities, and minimal infrastructure. In that context, the informal trade of ore and gemstones isn’t just opportunistic, it’s functional. It acts as a parallel economy. A sort-of pressure valve.
Without it, the mine itself becomes the focal point for frustration. The first (and often only) visible interface between global demand and local reality. And this is where many well-intentioned interventions fall short. Closing informal flows without addressing underlying conditions doesn’t remove the problem. It relocates it, often into more disruptive or less visible forms. And this is where the conversation around critical raw materials becomes uncomfortable. Because the challenge isn’t just geological. Or technical. Or even regulatory. It’s systemic.
Why this matters for the energy transition
We often talk about supply chain vulnerability in terms of geopolitics or concentration risk. And rightly so. But there is another layer, less visible, but just as important. A significant portion of global supply originates in complex, informal, or semi-formal systems that don’t align neatly with policy frameworks or corporate reporting structures. This creates three persistent challenges:
Data gaps: Material flows are difficult to quantify accurately, distorting supply–demand understanding
Traceability limits: ESG and due diligence frameworks struggle to capture real conditions on the ground
Policy misalignment: Interventions designed at national or international level often fail to translate locally
In other words, we are trying to build a highly coordinated energy transition on top of systems that are anything but coordinated.
The illusion of control
There is a tendency (particularly in policy and strategy discussions) to assume that better regulation, better data, or better technology will bring these systems into alignment. And to some extent, sure, they can. But only if they are grounded in how these systems actually function.
In places like Alto Ligonha, the mining system is not just a supply chain. It is a socio-economic ecosystem. One that intersects with informal labour markets, Cross-border trade networks, Local governance structures, and environmental pressures (including deforestation – but that’s another story).
Trying to “fix” one part in isolation, whether that’s traceability, licensing, or enforcement, rarely works. Because the system adapts.
Working across the layers
Unfortunately, I can't claim to have a solution to this. The reality is that challenges like this are not solved, they are managed. Iteratively, imperfectly, and over long time-horizons. But what is clear is that any meaningful approach needs to operate across multiple layers at once:
Technical: understanding the geology, mineralogy, and processing pathways
Economic: recognising how value is created, distributed, and captured
Policy: aligning incentives, regulations, and enforcement mechanisms
Social: acknowledging the lived realities of the communities involved
Too often, these perspectives are treated separately. In practice, they are inseparable.
A different way of seeing supply chains
What this “little mine” represents is not an anomaly, it is a window into how a significant part of the global raw materials system actually works. Messy. Fragmented. Adaptive. And deeply human. If we are serious about building resilient, responsible supply chains for critical raw materials, we need to move beyond simplified narratives. Understanding that not every challenge can be solved with a new policy framework or a digital tracking system.
Sometimes, the first step is simply understanding the system as it is, not as we would like it to be.
There is a tendency to focus on the scale of the energy transition, i.e. the gigafactories, the megaprojects and the national strategies. But it is worth remembering that much of this transition is built, quite literally, from the ground up, in places like Alto Ligonha, whose operations don’t appear in headline statistics, but quietly sustain the flow of materials the world increasingly depends on.
Ultimately, the question is not whether these systems should exist, because they already do. The real question is whether we are willing to engage with their complexity, or continue designing solutions for a version of the supply chain that only exists on paper.