Policies aimed at fostering economic diversification through regulating investment in the extractives sector have been seen by scholars and development agencies as critical for building sustainable development. However, strategies for “productive linkages” – the interlacing of a country’s export sector with its domestic economy, resulting in higher domestic production, employment, upgraded skills and technology, among other positive outcomes (Hirschman 1977) – have been slow to materialise. In Southern Africa, domestic business and labour interests are increasingly calling for strategies to tie foreign mining investments to local economic transformation. These include local content policies, which work by incentivizing local participation and in-country value addition – for example, through encouraging mining firms to contract “upstream” services from local companies, or engage in the “downstream” local processing of mineral ores. Similar challenges in harnessing local development linkages to mining investments are faced in many Canadian contexts, where Impact and Benefit Agreements between companies and communities have provided mixed evidence on the long-term potential of productive linkages strategies. In Southern Africa the prospects for building linkages have been eroded by poor resource governance and diminished state capacity due to neoliberal reforms. Research suggests that local content policies grounded in critical minerals’ extraction represent an important opportunity for state-led strategies for sustainable development.

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This cluster will study the policy challenges posed by critical minerals for state policy-makers and domestic business and labour interests by focusing on research gaps in 2 key policy areas: domestic business capacity and the options for strengthening local content strategies around critical minerals; and the state’s technical, financial and institutional requirements for developing a sustainable productive linkages strategy linked with critical minerals and new green technologies. In the first instance, significant research gaps remain around issues of gender and rural/urban divides in the distribution of extractive-related benefits emerging from the promotion of local critical mineral linkages. In the second, the cluster will explore the capacity needs for domestic and regional strategies for building critical mineral linkages, including the poorly understood issue of how such linkages might be leveraged to meet national development targets around electrification, on a continent where two-thirds of citizens lack reliable access to electricity.

Revenue, Equity and State Services

• Contract Negotiation and Bargaining Power
• Transparency/oversight of contract negotiations
• Distortion/deflection of policy intentions by politicians and foreign investors
• Involvement of non-state actors/stakeholders
• Inclusion of/negotiations surrounding HIAs and EIAs
• ‘Trade-offs’ of new mining investments: experiences and alternatives

Ownership structure: trends, innovations and development outcomes

• Tracking new investment and ownership patterns in CM extraction and processing, and comparative differences in revenue and distributional outcomes
• Dynamics and outcomes of state regulation of CM ownership in comparative perspective; including issues of local inclusion/participation, rent-seeking, geopolitical impacts, financing and technical contingencies, commodity form, etc.

Revenue Sharing Mechanisms and Funding Social Services

• CM/mining taxation and health: assessing impacts and strategies, including through Health Impact Assessments of CM extraction
• Comparing and assessing legal frameworks around health/ social revenue/fiscal duties and integrating implications of global tax rule changes
• Early inclusion of beneficiation in planning/policy formulation and mine lifecycle

Institutional innovation around taxation

• Tax decentralisation and revenue distribution: practices and alternative strategies
• Cost-benefit analysis of green technology and revenue and economic impacts
• Changing international taxation codes and local impacts and opportunities

Community Impacts and Community Interest Representation

• Understanding the impact of CM extraction on local communities: social, economic, environmental
• FPIC and CM extraction
• Representation, awareness and effectiveness of community interests around CM development