
Using transparency to benefit from the EU’s mineral partnerships
Three ways EITI engagement can help countries, companies and communities benefit from the EU’s mineral partnerships.
This week, representatives from industry, government and civil society gather in Brussels for EU Raw Materials Week. The event will focus on the EU’s strategy for securing a sustainable supply of minerals, in line with the recently adopted Critical Raw Materials Act. A cornerstone of this strategy is forging partnerships with mineral-rich countries.
To date, the EU has established strategic partnerships for critical raw materials with 14 countries, including Argentina, Democratic Republic of the Congo, Kazakhstan, Norway, Ukraine and Zambia. In cooperation with the United States, the EU has also launched the Mineral Security Partnership (MSP) Forum, which facilitates investment in mineral supply chains between buyer and producer countries.
To date, the EU has established strategic partnerships for critical raw materials with 14 countries.
Both the EU and the MSP have committed to promoting good governance, transparency and sustainability through partnerships. Their criteria for selecting partners include transparent business practices and robust environmental and social standards. EITI reporting can help mineral-producing countries and companies meet these criteria, enhancing their eligibility and fostering sustainable, trusted partnerships.
1. Strengthening countries’ eligibility as partners
EITI reporting enables countries to demonstrate alignment with the EU’s principles for mineral partnerships. The Critical Raw Materials Act highlights the EU’s preference for partners with transparent business practices and stable governance. Similarly, the MSP’s Principles for Government Cooperation emphasise transparency in licensing and fiscal frameworks as well as membership in international initiatives promoting a responsible minerals industry. Both partnerships also highlight the importance of meaningful community consultation and managing social and environmental impacts.
EITI reporting enables countries to demonstrate alignment with the EU’s principles for mineral partnerships.
Through EITI reporting, countries can showcase their commitment to these principles by disclosing key information:
- Fiscal frameworks, licensing procedures and beneficial ownership: Reporting under EITI Requirement 2.1 and 2.2 allows governments to meet expectations for transparent licensing and fiscal frameworks under the MSP. In combination with disclosure of contracts and beneficial ownership information (Requirements 2.4 and 2.5), reporting on these requirements shows commitment to transparent business practices and good governance. EITI membership also aligns with the MSP’s preference for countries engaged in responsible mining initiatives.
- Community engagement obligations: Disclosure of obligations for community consultation in licensing processes (Requirement 2.2) signals alignment with principles for meaningful community engagement.
- Environmental and social impacts: By mandating disclosure of impact assessments and monitoring reports (Requirement 6.4), countries can fulfil criteria for responsible management of social and environmental impacts.
By leveraging EITI disclosures, governments can improve their chances of involvement in EU partnerships and attracting investment under these initiatives.
2. Boosting companies’ investment appeal
EITI engagement can enhance companies’ eligibility for investment under the EU’s mineral partnerships. The EU’s bilateral partnerships aim to facilitate private sector investment from the EU into partner countries, while the MSP focuses on coordinating public investment in projects that prioritise transparency, environmental responsibility and community consultation.
EITI engagement can enhance companies’ eligibility for investment under the EU’s mineral partnerships.
Through EITI engagement, companies can improve their investment appeal under both partnerships:
- Transparency and anti-corruption: Mining companies that engage with the EITI as supporting companies show their commitment to transparent and responsible business practices, including implementation of rigorous anti-corruption policies (Expectation 7 for supporting companies).
- Payment and reserves disclosures: Transparent reporting of payments to governments (Requirement 4.1 d) and proven reserves (Requirement 3.1 b) under the EITI improves credibility and attractiveness for investors.
- Sustainability practices: Reporting on companies’ management of environmental and social impacts (Requirement 6.4 c) and community consultation processes (Requirement 2.2 a) signals alignment with responsible business practices.
By integrating EITI standards into their operations, companies can fulfil criteria for MSP projects and stand out as reliable and responsible investment partners.
3. Building public trust in mineral partnerships
EITI reporting also fosters public trust, a critical factor for the resilience of mineral partnerships. Stakeholders in some countries have raised concerns about limited transparency in strategic partnerships with the EU. Transparent reporting on contract terms and community engagement can help address these concerns and ensure smooth project implementation.
EITI reporting also fosters public trust, a critical factor for the resilience of mineral partnerships.
Governments can strengthen public confidence by using EITI reporting to disclose:
- Partnership terms and contracts: Providing details on the terms of mineral partnership agreements and project contracts (Requirements 2.1 and 2.4) promotes informed public discussion and reduces the risk of conflict.
- Exploration activities: Disclosing information on exploration processes and reserves (Requirement 3.1) helps align public expectations with project timelines and potential outcomes, fostering trust and reducing misunderstandings.
A foundation for sustainable partnerships
The EU’s expanding mineral partnerships present significant opportunities for mineral-producing countries and companies. By engaging with the EITI, governments and companies can demonstrate their adherence to good governance and sustainability criteria. This strengthens their eligibility for partnerships and investment, while ensuring public trust and long-term resilience. As the EU advances its vision for a secure and sustainable mineral supply, EITI engagement can play a critical role in ensuring shared benefit for all stakeholders.