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The finance sector can play a critical role in promoting responsible mining, particularly in the context of the rising demand for energy transition minerals such as lithium, cobalt, and rare earth elements. These minerals are essential for the global shift to sustainable energy systems, and the massive investments required, from exploration and extraction to processing and refining, present a unique opportunity to drive transformative change. Supplying the energy transition minerals at the scale envisaged will require a substantial increase in investment in the mining and processing industries. However, if this growth in mining is implemented according to current mainstream practices, it will result in considerable social and environmental damage, negatively affecting the local communities and environment where the mines are located. This assessment report covers the major issues that will need to be addressed if the low-carbon energy transition is to be supplied with the minerals it needs in a timely and responsible manner. The report focuses on how the financing of the extraction of these minerals should be reformed to help bring about their environmentally and socially responsible production, and the equitable distribution of the resulting financial and other economic and social benefits. It explores the scale of the challenge, in terms of both increasing the supply of primary metals, and the need to manage the demand for them through circular economy approaches and resource efficiency policies. Finally, it describes how ‘sustainable finance’ combined with ‘responsible mining’ could lead to the emergence of a mining industry that contributes to the sustainable development of local communities and countries that host the mines, and the countries that import them for their low-carbon technologies, as envisaged by the Sustainable Development Licence to Operate (IRP 2020).
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