One of the success factors for the significant commercial opportunity provided by this increase in mining capacity will relate to risk management and legal compliance.

Another success factor for such projects is arranging appropriate financing. Projects supporting “new energy” such as EV batteries face challenges such as funder concerns on price volatility, and the infancy of this sector meaning that funders are working out what sort of offtake commitments they need and want from particular projects. There will also be structuring risks – for example, in relation to “project on project risk” where mining projects link to manufacturing projects.

There is also currently a lack of contract standardisation for the supply of these raw materials. It is anticipated that this will come in due course; however, at the moment, negotiations on key terms can be time consuming.

Any increase in mining capacity will need to be accompanied by a comprehensive risk management programme that considers issues such as conflict minerals, child labour, human rights and supply chain due diligence and management.

To date there is very little specific legislation governing the sourcing of raw materials, but we expect this to change as the market grows. Indeed, the EU has already started to develop a common set of principles for a socially and environmentally sustainable mining sector in Europe. The OECD Guidelines for Multinational Enterprises and the OECD Due Diligence Guidance for Responsible Mineral Supply Chains are currently the main sources of reference for EU companies or those selling into the EU.

The UK, Germany, Belgium and the Netherlands encourage companies to implement the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High Risk Areas and the French devoir de vigilance requires companies to source raw materials in a socially and environmentally sustainable way.

The US and Australia have their own specific rules, but the broad principle is that these too relate to conflict minerals and modern slavery.