Critical minerals such as lithium, cobalt and nickel are becoming the “oil of the 21st century” as the scramble for precious metals deepens poverty and creates public health crises in some of the world’s most vulnerable communities, a report by the UN’s water thinktank has found.

The investigation by the United Nations University Institute for Water, Environment and Health (UNU-INWEH) concluded that the growing demand for lithium, cobalt and nickel used in batteries and microchips is draining water supplies, eroding agriculture and exposing communities to toxic heavy metals.

An estimated 456bn litres of water were used to extract 240,000 tonnes of lithium in 2024, the researchers found, with little of the financial benefit or technological advances from the green energy transition or AI boom reaching the affected communities.

“Critical minerals are quickly becoming the oil of the 21st century,” said Kaveh Madani, director of UNU-INWEH and the 2026 Stockholm water prize laureate.

“What we are selling as a solution to sustainability is actively hurting people somewhere else in the world. How can we then call the transition green or clean?”

According to the International Energy Agency (IEA), growth in demand for key energy minerals has been strong in recent years, with lithium demand rising by nearly 30% in 2024. The production of rare earths almost tripled between 2010 and 2023 as demand for electric vehicles (EVs) and powerful computer chips has soared.

The report found that while EVs may reduce emissions by consumers in North America and Europe, the environmental and health costs are borne by communities far away, in the mining regions of Africa and Latin America.

About 700m tonnes of waste, enough to fill 59m bin lorries, were generated by global rare-earth production in 2024. Africa – home to about 30% of the world’s critical mineral reserves – is being hit hard by the environmental fallout.

In the Democratic Republic of the Congo, one of the world’s biggest cobalt producers, the authors say extraction has caused the widespread contamination of rivers used for drinking, fishing and irrigation in the south-eastern mining belt of Lualaba province.

According to the report, about 64% of people in the country lacked basic access to water in 2024, while 72% of those near mining sites reported skin diseases and 56% of women and girls reported gynaecological problems.

“Some communities struggle on, walking more than a mile to collect water, while others are being forced to abandon their homes for urban areas, driving them further into poverty,” said Abraham Nunbogu, an UNU-INWEH researcher and the report’s lead author.

Lithium extraction often requires large amounts of water to be pumped from underground salt flats and evaporated, while chemical processing of other critical minerals can contaminate rivers and underground reservoirs.

Latin America’s lithium triangle – the high-altitude salt flats that stretch across Argentina, Bolivia and Chile – hold some of the world’s largest reserves of the metal. They are also some of the world’s most arid ecosystems.

In Bolivia’s Uyuni region, some communities can no longer reliably grow quinoa, while in Chile’s Atacama salt flats – where lithium and other mining account for as much as 65% of regional water use – lagoons are drying up.

“These salt flats are the traditional territory of several Indigenous peoples. Their agricultural and pastoral economies have been devastated by the intensive extraction of salt-flat brines and worsening water scarcity in what was already one of the driest ecosystems on Earth,” said José Aylwin, coordinator of the lithium and human rights in ABC project, a cross-border research project tracking the social and environmental impacts of lithium mining in Argentina, Bolivia and Chile.

“As the report highlights, there is an urgent need to move from voluntary compliance mechanisms to mandatory international and domestic due-diligence standards.”

The UN researchers warn that the damage is expected to worsen because lithium production must increase ninefold by 2040 – the IEA estimates eightfold – while cobalt and nickel extraction must double to meet climate targets.

The authors say legally binding global standards on mineral sourcing, tighter controls on toxic waste and water pollution, and independent monitoring of water use and heavy metal contamination are needed to regulate industries.

Without an overhaul, the green transition risks repeating the patterns of fossil fuel extraction – enriching wealthier nations while leaving poorer communities to bear the cost.

“We thought the Industrial Revolutions were progress and now we understand the damage it caused, so we are launching another revolution to fix it. But once again, the burden is falling on the poorest. We are just moving it from the Middle East to Africa and Latin America,” Madani said.

While the report paints a bleak picture of the environmental costs of the rare-earth extraction boom, some communities and governments are pushing back, said Thea Riofrancos, a political scientist at Rhode Island’s Providence College who studies extraction and the energy transition.

Protests in Argentina and Chile have challenged lithium projects in the salt flats, while Indonesia has banned exports of raw materials, including nickel ore.

“We have seen anti-mining protests becoming more frequent and more militant around the world over the past two decades,” she said. “Communities are forcing governments to pay closer attention to the costs of extraction.”