International Cooperation for Financing Responsible Mining

Mining finance is driven by specialist capital concentrated in a small number of financial centers and has shrunk dramatically over the last decade in Western markets. Attracting non-specialist finance to mining is proving extremely difficult due to the sector’s challenges including commodity pricing cyclicality and volatility, operations’ long lead times and increasing costs, ESG risks and their reputational impacts, and geopolitical uncertainty exacerbating concentration risks. Considering the limited mining finance pools available in Western markets and strategic focus on industrial and defense stakes, government intervention, previously a hallmark of China’s positioning on critical minerals domestically and abroad, is on the rise. Responsibility is a key pillar of critical mineral strategies, aligning with societal expectations of responsible business conduct across borders and value chain levels, and with fair transition principles: ESG criteria should be viewed as a bolster to responsible investment and improving governance. Unlocking responsible financing for mining will require actioning international collaboration tools, amplifying public-private initiatives and better communication of minerals’ critical role in addressing global sustainability stakes.

Authored by Solange Harpham and Brenda Yeong, edited by Ludivine Wouters