The Role of Mining Companies and Investors in Conflict Areas

Gemma James, Rory Sullivan, Sebastien Akbik

There was a full house for a Global Investor Commission on Mining 2030 workshop  at this month’s OECD Forum on Responsible Mineral Supply Chains.  The audience – which included mining companies, policymakers, investors and intergovernmental organisations – discussed the role of mining companies and investors in conflict-affected and high-risk areas (CAHRAs).

As the sector grows, mining should help not hinder conflict resolution

The mining sector has immense potential to drive growth, support sustainable development, boost infrastructure and reduce poverty in developing countries.  However, when it comes to conflict the sector has a mixed record of impact.

There is evidence of mines creating or aggravating the conditions for conflict either locally (e.g. with indigenous, First Nations, local communities or artisanal miners), regionally or nationally. At the same time, the mining industry offers the potential to make a meaningful contribution to sustainable development, to address the underlying causes of conflict and to support peace-building efforts.

This duality of perspectives is important. The reality is that there is, at present, no plausible path to net zero without very considerable expansion of mining.  Even with significantly greater recycling and efficiency of mineral usage and substitution of key minerals, there will be a huge growth in the number of mines globally and in the volumes of materials being mined. Many of these new mines will, inevitably, be in conflict-prone regions.

Mining 2030’s conflict work

The work of the Global Investor Commission on Mining 2030 is focused on addressing many of the drivers of mining-related conflict. The intention is that improved company practices, better state regulation and enforcement, more equitable distributions of harms and benefits, and inclusion and respect for affected stakeholders and rightsholders will help address some of the key drivers of mining-related conflict.

The Commission, for which Chronos acts as Secretariat, has analysed the different ways that the mining industry contributes to driving conflict and acknowledges the contribution that the industry can make to enabling and building peace. This work will inform recommendations on the role of investors in supporting companies and other actors on how they can contribute to reducing the likelihood of conflict arising or escalating and how they can contribute to increasing the likelihood of peace and stability in mining communities.

As part of the Commission’s work, we presented our initial findings to a multistakeholder workshop at the OECD Forum on Responsible Mineral Supply Chains chaired by James Megoran Director of Peacebuilding at Lambeth Palace and Louis Maréchal, Senior Advisor, Minerals & Extractives, OECD.

The workshop also featured a conflict case-study provided by International Alert. The session provided an opportunity to share preliminary research from Mining 2030’s Conflict Working Group and to obtain feedback from a group of conflict experts from mining companies, investors, development banks, civil society, indigenous peoples groups and government agencies.  

Four key themes emerged from the discussion:

• Conflict can be multifaceted and characterised by different drivers and failures: There are several types of failures, drivers and triggers which can characterise conflict, and are exaggerated through the lack of state capacity to function properly. Many participants raised poorly defined land rights and access to land, and the inability of states to manage this. Because of these deeply rooted issues, conflict can materialize even before the concession is awarded. The distribution (and the perceived distribution) of benefits among communities also impacts conflict dynamics.
  

• Tools for identifying and analysing conflict exist but they are not being applied: There are multiple existing and available standards, tools and frameworks but they are not being implemented and enforced in an effective manner. Many companies continue to struggle with implementing the basic minimum standards within a conflict context. Without a proper understanding of local dynamics, companies can become entangled within local conflicts and exacerbate the situation.
  

• There is a paucity of case studies on good practice by investors: Participants highlighted the lack of good practice case studies to share and learn from. There are few recorded examples of where investor actions such as exclusion or engagement had a consequence. Whilst it was recognised that investors have levers to pull to support responsible mining, how those actions play out and the effectiveness of those are uncertain. There was general agreement that investors screening out companies operating in certain conflict areas is not necessarily the most impactful way to effect change.
  

• Collective action across the value chain is needed: Investors are one actor in a system. The challenges also go beyond what any single mining company can do alone, so coordinated action is necessary to conduct robust conflict analysis, identify solutions, and address contextual challenges. Investors can support these partnerships and coalitions. Also, downstream companies, as the ultimate buyers of mined commodities, can support mining companies operating in conflict areas. Investors can engage those companies in their portfolios. As for investors, we learned that downstream companies pulling out from sourcing from conflict areas may not be the most impactful lever. Investors and downstream companies should be nuanced in their exclusion practices.

Next steps

The Mining 2030 Conflict Working Group will continue to consult through the summer on the research and this will be integrated into final workplans for investors which will be released at PRI in Person, Sao Paulo, in November 2025.

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Notes

Chronos has acted as secretariat for the Global Investor Commission on Mining 2030 since 2023. Mining 2030 is a collaborative investor-led initiative seeking to define a vision for a socially and environmentally responsible mining sector overall by 2030, and to develop a consensus about the role of finance in realising this vision. Conflict is one of seven areas that the Commission is focussing on. The others are:  

1.           Long-term investor expectations

2.           Aligned expectations across the value chain

3.           Regulations, incentives, and institutional frameworks reinforcing investor expectations

4.           Meaningful stakeholder participation and sustained benefits

5.           Address historic legacies and create positive legacies for current operations.

6.           Role of the investment ecosystem