This blog was originally published on Illuminem, and has been co-authored with Rhian-Mari Thomas. She is the CEO...
The global transition to renewable energy systems will be mineral intensive and, under the current linear economy conditions,...
Mining, Metals and Resource-based Development
Originally published by the Natural Resource Governance Institute. As leaders gather in New York to discuss how the UN can advance the principles and recommendations of the Secretary General’s Panel on Critical Energy Transition Minerals, CCSI’s Lisa Sachs, shares why now is the time for long-term resource governance practitioners to ask new questions, be honest about where we have fallen short, and join our work with other, related sectors.
For twenty years, those of us working on resource governance have been making the case that mining sits at the heart of sustainable development, and that resource-rich countries can convert their mineral wealth into broad-based development. A robust field grew to tackle the multidimensional challenges of resource governance with increasingly sophisticated tools: open fiscal models, contract databases, model laws, global multi-stakeholder initiatives, consolidated industry standards, and many trainings. In doing so, without quite noticing, those working on resource governance built a field with its own terms, boundaries, and sense of itself as complete. And yet, despite steadily better tools, the trajectory for resource-rich countries has not changed as we hoped.
Minerals are more central to the global economy than ever, and we are still asking many of the questions we asked two decades ago. Conflicts over land, fiscal promises that go unmet, environmental damage, projects stalled by mistrust; both the headlines and the framing questions at conferences are reminiscent of two decades ago. Few mining communities are meaningfully better off, and a quarter century into the era of transparency (of contracts, payments, and budget), we often cannot say how value is divided. From what we can see, wealth has not meaningfully improved the lives of the citizens of many resource-rich countries. Two years ago, the UN Secretary-General convened a multi-stakeholder panel on critical minerals, framed around not repeating the patterns of extraction and exploitation; a call to action that reflected concern from low and middle income countries that two decades of effort had not bent the curve. The panel worked admirably (and swiftly) to produce a report that consolidated twenty years of recommendations. But it did not grapple with why those efforts had fallen short.
Part of the answer is that resource-based development is genuinely hard. A single project involves multiple companies, a national government, local and regional authorities, the communities on the land, financiers, off-takers, and the home governments of the investors, each with its own interests, time horizon, and leverage. Geography compounds the challenge: value chains are spread globally: the mine in one country, processing often elsewhere, and the market in yet another country, with value and impacts unevenly distributed. And much of what determines the outcome happens behind closed doors.
Even when the terms are known, we are not agreed on what a ‘good deal’ looks like. For some, a fair outcome is one where the state captures the bulk of the value and the project advances the country’s own development strategy. For others, the measure is whether communities who bear the impacts negotiate their own terms. There is no agreed standard for decisive terms like shared-use infrastructure, dispute settlement, closure liabilities, audit rights, or the corporate structuring behind a deal’s tax and legal exposure.
The benefits and the costs of mining fall unevenly by their nature: revenue accrues to the capital while the disruption lands on the community, gains arrive over decades while costs arrive at the start, one generation consents and another lives with the result. A deal can be fair to the state and unfair to the people nearest the mine; fair at signing and unfair twenty years on. While those of us in the field have at times recognized some of the inherent tensions and trade-offs, we have rarely found a framing that holds all of these elements in view at once. Part of the reason is that the field is divided along the same lines as the trade-offs: experts often specialize in one area: fiscal terms, community benefit, environmental and legal safeguards, dispute settlement, corruption.
When we do come together to talk about these intersectional components, we continue to do so within the framing of the natural resource sector as its own field, with its own technical features, institutions, standards and debates. But treating resource governance as self-contained is precisely what has kept it from working. We have become very good at governing the mineral and have left the system that gives the mineral its value to others. In reality, resource governance is a challenge inseparable from the larger fields of development, geopolitics, and international finance. Whether a mineral endowment becomes development is decided by the capital that builds power systems and ports, by the energy planning that determines where processing is viable, and by the international financial architecture that determines fiscal space and borrowing costs, and by geopolitics with its ever-powerful carrots and sticks. Resource governance is inherently part of all of this, and shaped by it at every turn. Yet the field has built its standards, its contracts, and its transparency mechanisms largely apart from the international financial institutions, the energy planners, and the fiscal, financial, and public-investment decisions that set the result.
This is a rare moment of attention for a set of issues that spent years at the margins. Minerals are in the news daily, capital and political attention have returned, and new actors who have never worked on resource governance are shaping the agenda. Many arrive as if there had never been a field at all, which risks discarding two decades of hard evidence about what works and what does not. But it is also telling that these new actors are finding the field largely the same as we found it twenty years ago.
For those of us who have been working in the field for decades, there are two powerful reasons that now is the time for a rethink. First, several of the most physical constraints to resource-based development have shifted. Clean power can now be produced affordably and locally where the planning is done to support it. Markets that were assumed to be global and centralized are becoming more regional, as more regions move to build their own capacity and secure their own supply. And the recognition that integration and regional coordination are necessary has grown. And second, supply-security concerns and the return of industrial policy have opened real room for integrated, development-oriented strategies that were politically unattractive a decade ago. The barrier to integrated, development-oriented resource strategies is now mainly institutional and architectural: whether the field organizes itself to work across the systems it has always been part of.
The most valuable thing twenty years of work leaves us with is not fixed answers but a set of hard-won learnings, including, most importantly, the limits of the approaches we have tried. Those who have spent decades in this field should not cling to what we have been trying this whole time; that would be misreading both the evidence and the moment. Defending a position we have held for so long risks entrenches an old framing even as its assumptions prove flawed and the systems beneath it move.
But the depth of experience is critical: we know what was tried, what mattered, and why earlier efforts fell short. When the same questions are asked anew, the institutions and individuals who have engaged deeply in that work are best placed to reflect on how to think differently about the questions and the answers, so that we do not repeat the patterns of the past. Doing so requires a level of reflection and reckoning that may be uncomfortable to longstanding leaders in the field. And yet, knowing the terrain well enough to reframe the question – and push the conversation forward, rather than defend or replay the past, is an essential contribution two decades in this field can offer.
The task now is to foreground the interconnections, where the outcomes are actually decided. A processing facility is viable when the energy system has been planned to power it affordably. A mineral corridor pays off when the transport and the industrial capacity around it are sequenced together rather than negotiated piece by piece. Shared water infrastructure can serve the mine, the farms, and the cities downstream when it is planned at the basin level rather than built in parallel. An endowment becomes development when its financing is tied to a costed investment plan inside a national or regional strategy. A larger government take and a tangible community benefit become less of a fight over a fixed sum when the project is built into a development strategy that enlarges what there is to share. Affordable power, regional markets, and secured demand come together when they are sequenced as one. Seen as one system, the trade-offs that looked fixed start to give.
This matters to the people who fund the work as much as the people who do it. The opportunity is to back new thinking—including interdisciplinary work that does not fit neatly in any one silo. To draw on the people who carry decades of experience, not to ask them to defend what they built, but to ask what it taught. That work matters now in a way it has not before, with the questions open again and the moment ready for different answers.
