A new report from the UN Environment Programme-hosted International Resource Panel (IRP) is calling for sweeping reforms in the financing and governance of mineral exploration and mining to ensure a just and sustainable global energy transition.
With mineral extraction now accounting for 50% of total raw material extraction globally—up from 31% in 1970—the report warns that without responsible financing and regulation, the push for clean energy technologies could come at a high environmental and human cost.
Titled “Financing the Responsible Supply of Energy Transition Minerals for Sustainable Development”, the report highlights the booming demand for minerals such as lithium, cobalt, nickel, and rare earth elements, which are essential for solar panels, wind turbines, electric vehicles, and battery storage systems.
Demand for these minerals surged by 8–15% in 2023 alone, and lithium demand by 2050 is projected to reach nine times the world’s 2022 production.
“The mining industry must support sustainable development and respect both human rights and the environment,” said Janez Potočnik, Co-Chair of the IRP. “Through sustainable finance, responsible mining should become the norm—not the exception.”
Mining: Capital-Intensive and Risk-Heavy
The report notes that mining is a high-risk, capital-intensive industry that requires significant investment across its lifecycle—from exploration to mine closure, and including processing and refining.
A survey of mining companies conducted for the report revealed that while maintaining environmental standards is viewed as costly, most firms estimate these costs add less than 25% to operations. Encouragingly, many believe that strong Environmental, Social and Governance (ESG) performance will attract new investment.
Circular Economy and Reducing Demand
Even with strong recycling efforts, the report estimates that meeting net-zero targets will require US$450 billion in investment by 2030, and $800 billion by 2040, according to the International Energy Agency.
Supporting Artisanal and Small-Scale Mining
The report also calls for targeted support to improve ESG standards in artisanal and small-scale mining (ASM), which often lacks formal oversight. Recommendations include:
- Licensing reforms tailored to local conditions
- Capacity-building and technical assistance
- Better access to finance and geological data
- International sustainability frameworks to reduce risks and improve funding access
Rewarding Responsible Mining
The report criticizes current market practices for failing to reward responsible mining. To address this, the IRP proposes:
- Government-backed certification schemes
- Fiscal incentives for companies meeting high ESG standards
- Improved market access for responsibly sourced minerals
Key Recommendations
The IRP outlines several action points to steer global mining towards sustainability:
- Strengthen financial institutions’ ability to support ESG-compliant mining
- Create digital product passports with ESG tracking for all minerals
- Make ESG-compliant mining eligible for climate and sustainable finance
- Link mining investments to biodiversity and climate-positive outcomes
- Establish a global Mining Sustainable Development Fund, funded through a levy on mining companies, to support training, research, and legal aid for developing countries
- Build a global database on mine tailings and the availability of companion metals
- Foster equitable partnerships between resource-producing countries and mineral-importing nations