The United Nations Environment Programme (UNEP)-hosted International Resource Panel (IRP) has called for a reform of the global financial system, governance, and regulation of mineral exploration and mining to ensure responsible investment and a fair energy transition.
According to the new report, Financing the Responsible Supply of Energy Transition Minerals for Sustainable Development, mineral extraction now accounts for 50% of annual global raw material use, up from 31% in 1970. Financing responsible mining, the report says, will be critical to achieving a clean and just energy future.
Growing demand for energy transition minerals
Mineral extraction has increased fivefold since 1970, driven by the rising demand for materials used in clean energy technologies such as solar panels, wind turbines, and batteries. In 2023 alone, demand for nickel, cobalt, graphite, and rare earth elements grew by 8–15 per cent, while lithium demand by 2050 is projected to reach nine times the 2022 production level.
The report analyses demand, production, trade, and financing trends across key mineral-producing regions — including Africa, China, and South America — and proposes strategies to boost responsible investment across the mining value chain.
“The demand for minerals and metals needed for the energy transition requires a mining industry that contributes to sustainable development while respecting human rights and the environment,” said Janez Potočnik, Co-Chair of the International Resource Panel. “Through sustainable finance, responsible mining can become the default, not the exception.”
Financing and ESG pressure
Mining remains a capital-intensive and high-risk industry, relying on both public and private investment across exploration, processing, refining, and mine closure.
A survey cited in the report shows that most mining companies view maintaining environmental standards as costly but estimate it adds less than 25% to operational expenses. Many also believe that strong environmental, social, and governance (ESG) performance can attract new investors — placing the financial sector in a strong position to push for higher ESG compliance.
Circular economy to ease pressure
The report emphasizes that improving circularity — through recycling, eco-design incentives, green bonds, and public-private partnerships — could significantly reduce the need for virgin materials. However, even with strong recycling measures, the required investment is huge: the International Energy Agency (IEA) estimates that achieving net zero by 2050 will require USD 450 billion by 2030 and USD 800 billion by 2040 in mining investments.
Supporting artisanal and small-scale mining
The IRP calls for better transparency, formalization, capacity building, and financial inclusion in artisanal and small-scale mining (ASM). It recommends simplified licensing, access to geological data, and an international sustainability framework to help ASM operators manage risks and access finance.
Rewarding responsible mining
To make ESG efforts more visible and valuable, the report urges governments to implement certification and incentive schemes, including tax breaks and improved market access for responsible producers.
Key recommendations
The IRP report proposes several actions to promote responsible financing and governance of energy transition minerals:
- Strengthen financial institutions’ capacity to identify and fund high-ESG mining projects.
- Develop a digital product passport for mineral commodities, detailing ESG data along the value chain.
- Mandate site-level ESG and financial reporting, including gender and indigenous rights considerations.
- Include responsible mining in sustainable finance and climate finance taxonomies.
- Exclude mining from protected areas while linking financing to climate and nature-positive outcomes.
- Enable companies with validated ESG transition plans to access green finance.
- Introduce fiscal and monetary policies that support responsible mining and metal circularity.
- Implement a global ad valorem levy to fund a Mining Sustainable Development Fund for training, innovation, and capacity building.
- Establish a global database of mine tailings and track minor metal availability.
- Foster mutually beneficial partnerships between resource-producing and importing nations.
Aligning with global sustainability goals
The report supports the work of the UN Secretary-General’s Panel on Critical Energy Transition Minerals, the International Council on Mining and Metals’ (ICMM) 2024 commitment to nature-positive mining, and the UN Environment Assembly’s resolutions on sustainable mineral resource management.
