World Bank to Scale Critical Minerals Business Fivefold in 5 Years
World Bank President Ajay Banga announces a massive scale-up in critical minerals and private capital to boost jobs in developing nations.
In a bold move to reshape the global supply chain and empower developing nations, the World Bank Group has announced plans to expand its World Bank critical minerals business by five times over the next five years. World Bank President Ajay Banga revealed this ambitious strategy during a plenary session at the institution's Annual Meetings in Bangkok, emphasizing a shift toward keeping economic value and employment within the countries where these minerals are sourced.
Empowering Local Industries in 20 Nations
The World Bank isn't just looking at extraction; it is focusing on value addition. President Banga stated that the institution has identified 20 countries for potential partnerships aimed at developing local industries. By doing so, the goal is to ensure that developing economies do not merely export raw materials but instead build the infrastructure to process them, thereby retaining more jobs and wealth at home.
To kickstart this vision, the World Bank has launched its first "country compacts" in collaboration with other multilateral development banks (MDBs). These agreements are designed to create a robust framework for industrial growth in the minerals sector.
The Rise of Economic Corridors
Beyond mining, the World Bank is aggressively investing in economic corridors—strategic routes that blend infrastructure development with investment opportunities. The scale of this effort is evident in the numbers: the institution launched 52 new economic corridor projects last year, a significant jump from the 23 projects initiated the previous year.
Banga shared a compelling example of how these corridors provide unexpected benefits. He noted a specific route originally designed for transporting minerals that has since become a lifeline for local farmers, allowing them to move crops to markets more efficiently and sparking the growth of towns and cities along the way.
A Massive Surge in Private Capital
The World Bank is also transforming how it finances development by leaning heavily into private sector mobilization. The results have been dramatic:
- Total Private Capital: Mobilized USD 112 billion last year, compared to approximately USD 35 billion in fiscal year 2022—a more than threefold increase.
- Overall Financing: Including the bank's own funds, total financing exceeded USD 230 billion.
- Regional Growth: Private capital mobilization nearly tripled in lower-middle-income countries, quadrupled in upper-middle-income countries, and more than doubled across Africa.
Addressing the "Fragile" Gap
Despite these gains, Banga admitted that attracting commercial investment remains a struggle in low-income, fragile, and conflict-affected economies, where mobilization has remained flat. To combat this, the World Bank is implementing tools such as guarantees, equity, and local currency financing to mitigate currency risks and improve access to funds.
Furthermore, the bank is collaborating with other MDBs to create common mechanisms for transferring investments, which would free up capital to be redeployed into new development projects.
The Battle Against the Global Jobs Gap
The driving force behind these financial maneuvers is a looming crisis: a projected global gap of approximately 800 million jobs. Banga warned that failing to provide opportunities for the youth could lead to severe consequences that transcend national borders.
"A job is not a statistic. A job is dignity," Banga remarked, stressing that employment is the cornerstone of a young person's ability to build a future.
The World Bank's comprehensive development model now integrates four key pillars to bridge this gap:
- Public Financing: Used where markets are unable to reach.
- Private Capital: Deployed where it can generate jobs at a massive scale.
- Philanthropy: Utilized to support early-stage, high-risk ventures.
- Technology: Implemented to make the entire financing process more effective.
While the jobs gap is a daunting projection, Banga insisted that it does not have to be the inevitable future, provided that development initiatives are scaled up and implemented with greater urgency.