How to turn the critical minerals boom into a development win

The rapidly accelerating global demand for critical minerals — essential for clean energy technology and defence — has put the development sector at a crucial inflection point. While the race to secure these resources brings enormous economic potential, it also carries significant risks, sparking debate over how to turn this moment into a true development opportunity rather than another chapter of extractivism. During a Devex Impact House event on the sidelines of the World Bank and International Monetary Fund annual meetings this week, experts said this will be a balancing act. “There are a lot of interests we need to balance as we look at this expanding space,” said Aubrey Hruby, co-founder of Tofino Capital and transaction adviser at Palladium. “How can we balance the need to add value and create robust industries with the fact that countries are competing globally for this type of investment.” Africa is of particular concern when it comes to critical minerals mining, she added, as it holds significant, but largely underexplored, mineral reserves. According to a recent Brookings report, Africa is expected to hold about 30% of the world’s proven critical mineral reserves. Standard setting among private players For large-scale players, the emphasis is on a holistic, long-term approach. Darius Jonker, vice president of government and international relations in the U.S. and Latin America division of Anglo American, a company with over 100 years of operation in the developing world, said that its purpose is “reimagining mining to improve people's lives.” He explained that the company designs “sustainable mining plans” to create a framework for how their projects impact people’s lives. “There really are a number of sensitives you have to approach correctly,” he said. This level of due diligence is particularly critical as many operations are built on indigenous land, demanding compliance with frameworks such as free, prior, and informed consent, or FPIC, and various United Nations human rights guidelines. In reality, he said, that means community engagement. But while large companies such as Anglo American are setting high standards, the broader mining landscape is diverse. Many small and medium-sized enterprises, or SMEs, and artisanal miners lack these standards, leading to major governance challenges. “There is a mad rush around critical minerals,” said Patrick Heller, chief program officer at the Natural Resource Governance Institute. He stressed that the current moment requires governments and development players to ground their policies in real market analysis to understand the rapidly changing landscape — new players, consolidation, and technological uncertainty. Two persistent priorities remain critical, he said, pointing to equity and integrity systems. It’s crucial to make equity practical at both the community and national levels, he said. This means turning FPIC into a standard “that actually drives action, rather than something that just exists on paper,” and defining “what a fair deal means” for citizens. And investing in systems to govern who gets licenses and how they are managed. “Projects are going to get in the hands of those who aren’t capable of developing them efficiently, and it will serve no one’s interest, except for a very small set of people.” To address the challenges in informal and rural settings, innovative development and technology solutions are emerging. For example, the company Sabi is buying from small producers of minerals such as tungsten and lithium. Sabi provides capital and traceability, allowing these small-scale miners to “upgrade their production” and meet the standards required for American buyers. Hruby’s recommendation to African governments is to “make sure they don’t miss out on this moment” by prioritizing investment. Is perfect the enemy of productivity? "I think it is ‘get the investment in and improve it as you go,’ rather than strive for the perfect kind of regime,” Hurby said. “Because the investment dollars might not be there five years from now.” Heller echoed this, but added that a “perfect system” is an unrealistic goal, governments should not wait to set foundational standards. “The goal should not be a perfect system, but there are opportunities ... we are making sure that we have a certain set of standards built into our laws, into our licensing procedures, into companies and signing contracts,” he said. “Because once you get those things locked in, it's hard to change them afterwards.”