Critical minerals boom risks second funding gap as governance support shrinks
Washington-based donor network says development finance for mines, processing facilities and infrastructure is expanding while funding for transparency, civil society oversight and community participation is being cut.
Governments are increasing their investments in critical minerals projects, but a reduction in funding for governance and community engagement could slow down these very projects, a new report warns. The Trust, Accountability and Inclusion (TAI) Collaborative, commissioned by the BHP Foundation, found that demand for critical minerals is rising rapidly, while funding for mineral governance is tightening.
Official development assistance and philanthropic support are contracting, leading to concerns about transparency, regulatory capacity, civil society oversight, and community participation. This shift in funding priorities comes as geopolitical competition over critical minerals drives unprecedented government intervention in mining and processing.
TAI argues that the resulting imbalance represents a second, largely overlooked financing gap, focusing on the smaller amount needed to build institutions and community relationships that allow projects to operate. Even a modest $10 million investment could make a significant difference in closing this gap, according to TAI executive director Michael Jarvis.
The funding reduction coincides with efforts to accelerate permitting and reduce regulatory barriers, raising questions about whether deregulation will necessarily lead to faster mineral production. TAI's research highlights the importance of regulatory fairness, effective oversight, and meaningful community participation to prevent conflicts and legal disputes that could delay projects.
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