New World Bank mineral and metals strategy challenged to avoid pitfalls of extractionist approach
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Article summary
- New World Bank mining and metals approach aims to quintuple investments centred on country compacts and private sector mobilisation.
- Civil society and academics question strategy’s ability to adapt from failures of previous extractionist approach.
In 2025, the World Bank began an update of its approach to metals and minerals. In light of the increased geopolitical importance of mining – and given the World Bank’s long-standing support for economically, socially and environmentally damaging mining and resource extraction from the Global South, as outlined by US-based The Oakland Institute – civil society and academics have called for a radical departure from previous approaches (see Observer Winter 2025, Spring 2016, Spring 2015, Winter 2014).
The update process has been beset by confusion, and it has been unclear until very recently that the new website seems to constitute the new ‘strategy’. Whatever the case, it is clear that the new strategy will be closely linked to the Bank’s much-criticised ‘jobs agenda’ (see Observer Winter 2024), and anchored on “locally-led” country compacts. To date the Bank has launched four compacts with Bolivia, Malawi, Mauritania and Zambia, with plans for additional compacts to be finalised during the year. Crucially, the approach further embeds a reliance on private capital mobilisation and de-risking of private investments (see Observer Summer 2025, Autumn 2022) with its detrimental impact on state capacity to direct the just transition (see Observer Winter 2025; Briefing, A just energy transition deferred).
The Bank has shown its ambitions quite clearly in a blog stating that it plans to, “quintuple [its] support to metals and minerals in the next five years.” Providing further emphasis on the importance multilateral development banks (MDBs) have attributed to the issue generally, a 17 April joint MDB statement – which tellingly excluded Global South-led institutions such as the New Development and Asian Infrastructure Investment Banks – concluded with a ‘call to action’ to “rapidly scale diversified, resilient, and responsible critical minerals to manufacturing value chains.”
Sovereignty in times of crises and geopolitical pressures
The World Bank and broader MDB focus on metals and minerals must be seen within the increasing geopolitical and economic importance of mineral and rare earth supply chains, which is evident in recent agreements reached between the US and the European Union and the United Kingdom.
On 16 April, Mining.com reported that US Treasury Secretary Scott Bessent pressed the World Bank to, “pivot towards funding critical minerals projects in an effort to bolster a supply chain that’s currently dominated by China.” The article also stressed that, “[multilateral finance] is being repositioned as a tool to counter China’s dominance in mineral supply chains. The Asian country controls over 90% of rare earths and some other critical minerals, giving Beijing leverage over Western countries on trade matters.”
The strategy will confront the fact that geopolitical priorities of major MDB shareholders such as the US, Europe and Japan, and the dire economic circumstances faced by many mineral and metal exporters (see Observer Winter 2025), may curtail exporters’ ability to avoid the pitfalls of mining dependence outlined in the United Nations Conference on Trade and Development’s (UNCTAD) March and June reports.
“It remains unclear whether the strategy adequately confronts the fundamental development challenge facing resource-rich economies,” stressed Karabo Mokgonyana of PowerShift Africa. “History demonstrates that extraction-led growth, even when accompanied by significant foreign investment, rarely delivers sustained industrialisation on its own. The strategy’s success will be determined by its ability to expand the policy space available to resource-rich countries to pursue their own industrialisation and development priorities. Anything less risks repackaging a familiar extractive model in the language of the energy transition or minerals development,” she added.
