Mining Governance & Critical Minerals

CCSI conducted a study that maps a selection of the major initiatives designed to promote good governance of the extractives sector for GIZ. The mapping describes the scope and use of each initiative and highlights areas where initiatives overlap in their approach and focus. The mapping provides recommendations on the applicability of different subsets of frameworks and initiatives to different tasks and circumstances... read more.

Those supporting extractive projects tend to emphasize the benefits resulting from tax revenues and employment, while those opposing the project will often highlight the adverse impacts on the environment and impacted communities. CCSI is seeking to advance the integration of non-financial costs and benefits in fiscal assessments of extractive industry investments.

In partnership with the World Economic Forum, CCSI curated the Transformation Map of the Mining and Metals sector; it maps out the seven drivers that are already and will continue transforming the mining and metals sector.

CCSI created and manages the Negotiation Support Portal to improve the accessibility of tools, resources and technical assistance to support host governments' planning, preparing for, negotiating, monitoring, and implementing large-scale resource and infrastructure investments. The portal also facilitates coordination among support providers and host governments. In addition, CCSI has launched a series of meetings of negotiation support providers to create a forum to discuss common challenges and opportunities, and to facilitate greater coordination among support providers.

This 2011 project examined how the vast resource deposits in the Tete province, combined with other major investments along the Nacala and Beira corridors, can be the basis for sustainable, equitable and inclusive growth in the Lower Zambezi Basin.

CCSI was contracted to write the extractive industries section of the World Bank Diagnostic Trade Integration Study (DTIS) for Tanzania. The study identifies the internal and external trade constraints that hinder the development of the priority sectors, and provides policy recommendations on how these obstacles can be overcome.

CCSI has launched an interview series on “company personalities” looking in particular at how a company’s personality determines its negotiation strategy, the contractual provisions it pushes for, and the overall relationship between the company and the host governments. The interviewees are senior experts who have many decades of experience in advising governments in resource rich countries.

CCSI is a knowledge partner to the New Petroleum Producers Discussion Group project, co-organized and sponsored by Chatham House, NRGI, the Africa Governance Initiative and the Commonwealth Secretariat. This project aims to help emerging oil and gas producers to think critically about the various policy options available during the first steps of exploration and development, or when restructuring their petroleum sector. This project devises policy options which are most effective within a context of low institutional and sector capacity.

CCSI examined the advantages and disadvantages of different mineral regimes (licensing regimes vs. contractual arrangements) in 18 countries around the world. For the 13 countries that used mining contracts, CCSI further examined the contract negotiation and implementation processes of 30 mining contracts as well as the relationship between those countries' mining contracts and their legal regimes. CCSI also identified potential opportunities for external experts to support resource rich, low income countries in contract negotiations. 

This study surveyed the trend toward countries integrating competitive bidding provisions for mineral rights allocation into their national legislation and regulations, and sought to analyze the potential issues around these provisions. 29 countries are included in the review.

Written by a diverse group of 14 experts from Africa, Asia, North America, South America, and Europe, “Mining Contracts: How to Read and Understand Them” is a user-friendly guide to help policy makers, civil society, citizens, and the media understand the often complex and opaque terms of mining contracts. The guide is available in English and in French.

CCSI has examined local content provisions contained in legal frameworks governing resource investments, including in contracts, legislation and bidding practices.

CCSI has examined the use of built-in review periods in extractive industry contracts  as a mechanism for managing investor and host-country relations over the duration of a project. CCSI completed a survey of periodic review mechanisms contained in extractive industry contracts, to analyze how they have been used to date, and to understand the purposes for which they may usefully be applied.

Many governments, companies, and international institutions have endorsed contract transparency in natural resources, particularly within the extractive industries. However, more must be done to make contract transparency a standardized and meaningful norm that leads to better accountability within the extractive industries, as well as around investments in land, agriculture, and forestry.

CCSI, together with the World Bank and Natural Resource Governance Institute, has developed ResourceContracts.org, an online, searchable and user-friendly database of publicly available oil, gas and mining contracts from around the world. Users can search contracts by country, by natural resource or by type of contract; view summaries of key social, environmental, fiscal, and operational provisions; and download full contracts... read more.

International investment law has evolved rapidly into a complex web of over 3,000 investment treaties used to challenge a wide range of host state actions and inactions. These challenges expose host states to potentially significant financial costs, and can restrict the ability of such states to maximize the benefits—and limit the environmental and social harms—that can result from the exploitation of natural resources. This briefing note (updated in July 2022) provides an introduction to international investment law to assist stakeholders in grasping the diverse and significant implications of this body of law for the governance of investments in the extractive industries sector. This March 2024 piece showcases how investment treaties and investor–state dispute settlement (ISDS) interfere with the governance of critical minerals for a just energy transition and provides recommendations on how governments can curb that interference.

Monitoring fiscal reforms in extractive industries is an ongoing part of CCSI's research. CCSI is researching aspects of designing and implementing fiscal regimes in an attempt to identify legal and fiscal elements that can help avoid unintended consequences or disputes between an investor and the government over the course of the investment.

CCSI strongly supports the transparency of contracts and tax flows and has published research and papers making the business case for transparency, including two submissions to the SEC in 2011 and 2015.

Alongside growing revenue and contract transparency, increasing fiscal model transparency is needed. Only with financial model transparency can relevant actors better assess whether contracts are balanced in terms of fiscal returns and understand when revenues start flowing to the government. CCSI strongly supports financial model transparency and has developed two open fiscal models. We are currently welcoming feedback on their usefulness, user-friendliness, and on any observed inaccuracies.

The allocation of the rights to tax business profits of non-resident entities’ operations depends on whether these operations can constitute a “Permanent Establishment” (PE) according to the definition included in each DTA. CCSI's research and brief looks at this issue in the context of extractives and provides a sample clause that optimizes the PE definition for resource rich countries.

Building on the momentum created by the Platform for Collaboration on Tax’s draft paper regarding taxing indirect transfers of source country assets, CCSI and the International Senior Lawyers Project (ISLP) wrote a paper providing practical guidance to developing country governments on the taxation of indirect transfers of extractive industries’ assets. Indirect transfers occur when—instead of selling the asset—the shares of the domestic subsidiary, the shares of the foreign company with a branch in the country, or the shares of the holding company are sold.

CCSI supported the drafting and adoption of the 20 year Strategic Development Plan for Timor-Leste, and helped to develop new institutions and laws to optimize the use of the country's petroleum fund for development.

CCSI prepared a report on measuring employment from extractive industry investments that outlines two modeling techniques used to estimate employment multipliers: 1) The input-output (IO) model, and 2) The computable general equilibrium (CGE) model. The handbook explains the advantages, disadvantages, necessary inputs, and results associated with each model.

The employment potential of investments in extractive industry projects and land acquisitions for agriculture is often touted both by governments and by companies in support of investor-friendly policies and large-scale investments in natural resources. CCSI is examining how job numbers are calculated, which factors influence job creation, and the quality and sustainability of these jobs, as well as whether job creation generated from these investments is net positive.

This research project assesses the channels through which knowledge and technology can be transferred and, based on successful country case studies, provides recommendations on how governments can enhance technological spillovers in oil, gas, and mining... read more.

CCSI, IISD, and Engineers Without Borders researched the technological innovations in mining that are being developed, assessing when these technologies could be rolled out, and quantifying their impact on local employment and procurement and how local content policies should adapt.

CCSI looked at the economic prerequisites that attract first-degree downstream beneficiation industries—such as steel mills—and the extent to which these industries have contributed to further domestic linkages in the past, and assessed whether it makes sense to provide large incentives for these investments.

GIZ worked with CCSI to develop research and training materials around economic linkages to the resource sector.

The mineral-intensive global energy transition and the increasing material needs of a growing population will exacerbate mining’s footprint on the planet, under current linear economy conditions. Responsible primary production of minerals and metals needs to be combined with circular economy approaches. CCSI’s report Circularity in Mineral and Renewable Energy Value Chains: Overview of Technology, Policy, and Finance Aspects examines existing conditions as well as reforms needed to enable global circularity in the mineral value chains of solar photovoltaic (PV) panels and wind turbines, zeroing in on four key materials: aluminum, copper products, silicon, and steel. The project was supported by ICMM and the Enel Foundation.

CCSI, in partnership with Columbia Engineering and with support from the United Nations Industrial Development Organization (UNIDO), is undertaking a market assessment to strategically evaluate innovative clean energy technologies within the critical minerals sector across developing countries. The assessment focuses on the midstream and downstream segments of the mining value chain.

The Africa Mining Vision (AMV) provides guidance for the industrialization of African countries by leveraging their mining sector. However, it does not include guidance on how governments should embrace the climate change agenda. The localization of global value chains induced by rising carbon costs can represent an opportunity for better and further industrialization, deeper linkages, and sustainable development. CCSI's research explores these opportunities and suggests foundations for a climate-smart update of the AMV.

As we seek to meet the challenges of climate change impacts, many commodities will play an increasing role in decarbonizing economies. There are increasing challenges of addressing the emissions from extraction of these commodities needed to support the zero-carbon transition. CCSI, in a consortium with Carbon Trust, RMI, and the Payne Institute for Public Policy at the Colorado School of Mines, developed the Net Zero Roadmap to 2050 for Copper and Nickel Value Chains to support the copper and nickel mining sectors in taking collective, coordinated action by providing a clear, approachable, and accepted roadmap for decarbonization. The project was commissioned by the International Finance Corporation (IFC) and the International Council on Mining and Metals (ICMM), as part of the World Bank Group’s Climate-Smart Mining initiative.

The World Bank's Mining Sector Diagnostic (MSD) tool, launched in 2013, helps strengthen the governance and impact of the mining sector, including with respect to the investment environment within a given country. It is used to assess performance and provide a basis for future engagement. Working with the World Bank, CCSI is creating a climate change and energy transition module for the MSD, with a series of indicators and questions to be included in the diagnostic process under four pillars: (1) General Policies, (2) Mitigation / Decarbonization, (3) Adaptation / Resilience, and (4) Market Opportunities for Climate Action Minerals.