Minerals like nickel, lithium, cobalt and copper are foundational to the global clean-energy transition. Solar panels, wind turbines, EVs and battery storage cannot be built without them. Yet extracting, processing and transporting these “transition minerals” can be resource-intensive, polluting and ecologically destructive.
In Indonesia, for example, many nickel mining and processing projects rely on coal, undermining climate goals. Investments, including those from Chinese mining and metals companies have drawn scrutiny for deforestation, water pollution and soil degradation.
Social unrest related to transition-mineral projects is also on the rise. A 2024 Global Witness investigation discovered that in 2021-2023 nearly 90 per cent of violence and protests in emerging economies was linked to mining of these minerals, including projects owned or operated by Chinese companies.
At the root of these challenges are insufficiently disclosed impacts and under-engaged communities: a persistent gap in environmental and social transparency and effective community engagement.
While environmental and social challenges affect mining globally, the role of Chinese companies is particularly significant as they sit at the heart of the global transition mineral supply chain.
With this dominance comes a growing spotlight on their ESG (environment, social and governance) transparency and engagement with affected communities – a test they have been working to pass, though gaps remain.
A track record of selective transparency
A 2024 SynTao analysis shows that ESG reporting by Chinese “A-share” companies, listed on mainland China’s stock exchanges, has grown in volume since the consultancy started monitoring it in 2012.
Following this trend, most listed Chinese mining companies now reference their overseas operations in ESG reports, for example, Sinomine and Chengxin Lithium. A few go further by publishing dedicated ESG reports for overseas subsidiaries, such as CMOC for its TFM project in the Democratic Republic of the Congo (DRC) and Zijin Mining for its copper project in Bor, Serbia.
The growing attention to ESG reporting among listed miners has encouraged some of the largest unlisted players to begin engaging, though their progress has been slower.
In 2023, Tsingshan Holding Group announced the preparation of its first ESG and sustainability reports. These were to cover six entities – at the group level and its key subsidiaries – with completion targeted for mid-January 2024.
However, our search for publicly available disclosure has only discovered standalone ESG reports published by its listed subsidiary REPT Battero, Indonesia Morowali Industrial Park (in Indonesian), and Indonesia Weda Bay Industrial Park. Tsingshan Group did not respond to our request for comment on this issue.
Despite the progress, where companies do publish ESG reporting and include overseas content, that does not always mean full transparency.
In many reports, coverage of overseas operations consists primarily of expansion announcements or project listings, rather than information on project-level environmental and social performance. Take battery manufacturer CATL as an example.
Its 2023 and 2024 ESG reports do mention overseas projects – including its factory in Debrecen, Hungary which is due to begin mass production by early 2026. Its 2023 ESG report states that “the company invited residents and government representatives from Debrecen … to visit its facilities to learn about project progress and address stakeholder concerns.” It does not provide information on the concerns raised or how they were addressed.
This level of disclosure is noteworthy given that in November 2023 the Hungarian Supreme Court had annulled the project’s disaster management permit. That followed months of local protests and legal challenges from residents and environmental groups concerned about the project’s pollution and lack of public consultation.
This pattern extends to social impact disclosure as well. Information on donations and infrastructure development is more commonly reported in company ESG disclosures. While positive, this cannot substitute for real responses to more sensitive issues related to community loss.
For instance, Chengxin Lithium’s 2024 ESG report highlights drought relief and community clinics near its Sabi Star project in Zimbabwe but does not mention the resettlement of communities in Buhera district from their ancestral land.
This relocation has raised concerns over provision of free, prior and informed consent, livestock loss, land dispossession, disrupted livelihoods and unmet employment commitments. Chengxin Lithium did not respond to a request for comment on the relocation of communities.
The emphasis on philanthropic achievements and limited disclosure on response to project-related social conflicts reflects a pattern also seen in Chinese companies’ domestic ESG reporting. This approach may limit visibility into community-level impacts, complicate the identification of material ESG risks, and create reputational and supply-chain vulnerabilities for downstream consumers or business partners.
Beyond the selective reporting of environmental and social programmes, some companies do not provide details on certain ESG incidents. Sinomine’s 2024 ESG report, for instance, highlights its Bikita lithium project in Zimbabwe for mitigating environmental risks and supporting local development.
Yet it does not mention a temporary government-ordered suspension in May 2023, which stemmed from violations related to environmental, labour and immigration compliance. Sinomine did not address the omission in an email exchange concerning the issue.
Amid this broader pattern, some companies stand out for beginning to break the silence around sensitive incidents. CMOC, for example, acknowledged worker fatalities at its TFM project in the DRC in 2023.
The incident was noted in the chairman’s letter of the company’s 2024 ESG report, with additional details in the project’s standalone 2023 ESG report. While the disclosures could have provided more information on accountability, remedial measures, and follow-up actions, they represent a step forward compared with most peers in openly addressing such incidents.
Annual ESG reports are not the only disclosure channel, nor the only place where transparency gaps emerge. Shortcomings also appear in ongoing or periodic reporting and incident disclosure.
Following a 2022 fire and worker injuries at Indonesia’s Morowali Industrial Park, Tsingshan was reported to have delayed the release of safety information and referred to online posts about the accidents as company leaks. Tsingshan did not respond to a request for comment.
The need for meaningful community engagement
Respect for the principle of free, prior and informed consent remains one of the biggest ongoing challenges in overseas operations, particularly in project approval, environmental impact assessments, and resettlement processes.
Multiple factors contribute to these challenges, including governance weaknesses in host countries, power asymmetries, and gaps in companies’ understanding of and adherence to international principles. A recurring pattern is companies’ reliance on local authorities to handle consultation and resettlement.
Communities near Chengxin Lithium’s Sabi Star project told Global Witness during a field trip to Zimbabwe in 2024 that the local government had pressured them into consenting to relocation and taken a percentage of their compensation.
After the company transferred responsibility for the resettlement process to the local government, company managers did revisit the communities and pledged to communicate their concerns to local authorities, but many of those concerns remain unresolved.
Similar stories have been reported around the Zijin Mining’s COMMUS copper and cobalt project in the DRC. Local sources and civil society organisations alleged that the local authorities intervened in the resettlement process and appropriated portions of the compensation funds.
This reflects a broader pattern. While transferring relocation duties to government is not necessarily an attempt to evade responsibility, it limits companies’ ability to ensure meaningful outcomes for communities and themselves.
Moreover, during a project’s lifespan, community engagement by some Chinese companies remains focused on visible social contributions, often framed as corporate philanthropy or “corporate social responsibility”. Initiatives such as building schools and clinics, or donating supplies, are appreciated by communities, but could be complemented by more continuous dialogue on project impacts, community loss, grievances and shared decision-making.
There are some signs of change. Huayou Cobalt’s Arcadia lithium project in Zimbabwe and Zijin’s 3Q lithium project in Argentina hold or claim to hold regular community meetings. It is important to ensure that these meaningfully include all affected members, address vulnerable voices, and result in concrete actions that reflect community input.
The role of locally hired community liaison staff presents an additional layer of complexity. While these employees bring valuable cultural understanding and language skills, their way of operating can inadvertently create barriers.
During a 2024 Global Witness field trip to the Gwanda lithium project in Zimbabwe, operated by Tsingshan subsidiary Dinson, some community members reported that local staff had blocked direct dialogue with company management. When informed, company managers stated their surprise as they had viewed the staff as trustworthy. After a worker protest, the company engaged directly with the communities, a local partner organisation told us. This highlights that relying solely on local intermediaries can create risks for all sides.
Our field trip in Zimbabwe and communication with some Chinese companies did not suggest they are simply indifferent to project impacts or unwilling to listen to communities and civil society.
Yet we did observe that trust gaps often arise from various factors. These include companies’ limited familiarity with international norms, entrenched practices, hesitation to engage directly with communities for fear of unmanageable demands or criticism, and over-reliance on local authorities and staff to overcome language and cultural barriers.
Compounding these challenges is the lack of accessible and effective grievance mechanisms for affected communities to raise concerns. Our research has noted an increasing number of companies publishing complaint mechanisms on their websites.
These include Chenxin Lithium, Huayou Cobalt, Zijin Mining, Ganzhou Tengyuan Cobalt New Material, Comika Mining SAS in DRC (a joint venture of North Mining and Gecamines), and Daye Nonferrous Metals Group Holding (a subsidiary of CNMC). However, there is little publicly available information on how these mechanisms are used in practice or whether they effectively address community issues. This possible absence of responsive pathways can delay resolution, heighten tensions and allow relatively minor grievances to escalate.
Taken together, these challenges reflect a deeper structural weakness: the absence of clear, enforceable standards or guidance on how companies should effectively engage with affected communities. Without such frameworks in place, community participation remains vulnerable to being superficial, one-sided or symbolic, rather than truly inclusive and responsive to the lived experiences of local people.
Towards better ESG transparency and community engagement
Chinese mining companies are not alone in facing challenges around ESG transparency and community-engagement failings. International mining giants such as Glencore and BHP have also come under criticism for their poor performance in these areas. But transparency and community engagement in Chinese overseas mining projects reveal structural weaknesses.
Despite progress, the increasing volume of ESG reporting will only evolve into meaningful transparency when companies move beyond general statements and philanthropic highlights to disclose project-level environmental and social performance, and address sensitive incidents.
Likewise, genuine community engagement will only be realised when companies move beyond government-led or intermediary-driven consultation and philanthropic visibility. They need to establish direct, continuous and inclusive dialogue with the affected community, which in turn serves company interests by fostering trust and preventing the escalation of local tensions.
Fully aligning with widely recognised international principles and standards is a gradual process. Chinese companies need time to understand and effectively implement frameworks developed in unfamiliar contexts such as the Guiding Principles on Business and Human Rights. Yet given China’s rapidly growing role in the global mineral supply chain, accelerating these efforts is in the interest of communities, companies and China’s credibility as a responsible global leader.
This article has focused on the steps transition minerals companies can take to improve their approach to overseas projects. Another article I recently wrote for Dialogue Earth has suggestions on the part regulators can play in improving environmental transparency and making community engagement more meaningful.
The most pressing question now is whether Chinese regulators and policies can evolve to provide clearer frameworks, stronger oversight, and meaningful support to bridge these divides and foster truly responsible overseas investment.
This article was originally published on Dialogue Earth under a Creative Commons licence.
