4.2.1 Exclusive case study: Artisanal mining — A digital marketplace for democratising access to climate, social and mining finance

Written by Rob Kaparti, Partner at the Blended Capital Group, a firm specialising in strategic consulting and advisory for Indigenous economic development.

There are 45 million people working in the artisanal and small-scale mining (ASM) sector across close to 100 countries. 

Many of these miners produce critical minerals like copper, cobalt, rare earth minerals and lithium that are in short supply but essential for the clean tech that the energy transition requires.  ASM has historically lacked access to non-predatory capital, given the informal nature of the sector as well as the fact that constituent businesses are generally both small and located in underdeveloped economies.

As the global mining industry looks to increase its critical minerals capacity, ASM is a strategic opportunity where access to at-scale capital can support scaled professionalization, a process that improves lives, ecological outcomes and productivity of much needed minerals. Professionalization increases capacity through multi-pronged focus on governance, training, equipment and value chain redesign. Good practices in this context result in increased production, along with improved ecological hygiene that the Forest Smart Mining standard describes.

Success requires a common ‘language’ that is grounded in asset classes, KPI’s and validations, where investors and miners can interact in ways that increase transparency and understanding. 

Today’s technology, including blockchain and stablecoins, opens the door for practical solutions for investors that tokenize assets, a natural mechanism for blending capital stacks that include public and private financing. Active work is progressing toward the deployment of a digital marketplace that will open access for non-predatory capital and for blended pools of investors. This work, which is expected to mature within months, will result in a series of professionalisation programs across countries that improve lives, productivity and ecology in commercially realistic ways.

In this context, the artisanal mining sector is a natural fit for climate finance.

It integrates characteristics around scale, 45 million participants, productivity of critical minerals that are essential for the energy transition, and opportunities for transitioning to practices that improve ecological outcomes in areas like biodiversity protection and reforestation. Trust and transparency are the common denominators that investors require, which is core to the deliverables of the digital marketplace that is being stood up at present in order to democratise access to capital for ASM.