By Rob Karpati, Contributing Columnist
The mining industry stands at a crucial juncture, driven by a soaring demand for critical minerals essential for the global energy transition. However, the anticipated influx of mining investment has yet to materialize.
Why is this happening?
Current business models are outdated. Investors remain focused on traditional risks such as costs, exploration challenges, near-term price fluctuations, political instability, ESG (Environmental, Social, and Governance) concerns, and social conflicts. These worries are stalling much-needed growth. Without a sufficient supply of minerals, achieving NetZero will not only be delayed but also become more expensive. Business models that center on collaboration and engagement will be tomorrow’s winners. This includes increasing transparency of small cap exploration co.’s that are often more Yabba Dabba then they are Yabba Dabba Doo.
“Mining is at an inflection point where collaboration and innovative business models are not just beneficial but essential. By focusing on community engagement and formalizing artisanal mining, we can create a more inclusive and sustainable future for the industry.” – Robert Karpati, The Blended Capital Group
Robert Karpati, The Blended Capital Group
The industry recognizes the necessity of a just transition, one that minimizes conflicts and reduces risks, ensuring that everyone benefits. What does this look like?
A community-centric focus has become essential. Here are key aspects:
- Indigenous Engagement: Indigenous involvement is crucial, with 54% of global critical mineral projects located on Indigenous lands.
- Artisanal Mining Formalization: Artisanal and small-scale mining (ASM) often shares land with larger projects and serves as an early exploration indicator. The value and risks are intertwined between ASM and large-scale mining (LSM).
Business models that emphasize collaboration and engagement will shape the industry’s future. This includes:
- Increasing transparency of small-cap exploration companies, which often struggle with credibility.
- Major companies prioritizing community engagement.
- Expanding financing opportunities through non-traditional investors and blended finance, which can attract more investment.
- Formalizing ASM to enhance the dignity and productivity of work while mitigating associated risks.
The Blended Capital Group and our partners are dedicated to reimagining outcomes in artisanal mining. With 45 million miners operating in over 80 countries, the ASM sector is integral to a just transition. The formalization of this sector enhances both commercial viability for mining investments and impact investments. The time to act is now.
Reach out to discuss. Learn more about our partners: Alliance for Responsible Mining (ARM), Levin Sources, BanQu Inc., and Napier Meridian.
The mining industry must evolve to meet the demands of the energy transition. By adopting new business models that prioritize community engagement, transparency, and collaboration, the industry can overcome traditional risks and attract the necessary investments to drive sustainable growth.
Rob Karpati
