Highlights

• Researchers propose a structured framework for designing mining industrial policies that account for global value chain interdependencies.
• Case studies of Australia, South Africa, and Chile demonstrate the importance of complementing supply-side and demand-side policy measures.
• Effective critical minerals strategies require targeting high-value segments while fostering upstream and downstream linkages.

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A new open-access study in the Journal of International Business Policy by Dr. Guendalina Anzolin (opens in a new tab) (University of Cambridge Institute for Manufacturing) and Professor Carlo Pietrobelli (opens in a new tab) (UNESCO Chair at UNU-MERIT / Roma Tre University) offers a structured “taxonomy” for designing industrial policies along the mining value chain. Their work addresses a key challenge in today’s critical minerals economy: how to align demand- and supply-side measures to foster innovation, supplier upgrading, and long-term value creation.

Rare Earth Exchanges™ (REEx) reviews relevant academic studies and papers in the hopes of translating complex policy design frameworks into practical insights for investors, project developers, and policymakers navigating the critical minerals sector. By mapping how countries like Australia, South Africa, and Chile align—or fail to align—demand- and supply-side measures within global value chains, the hope here is that the study offers a blueprint for anticipating where national strategies may unlock value, create bottlenecks, or shift competitive advantage. For the REEx’s community, understanding these structural dynamics is essential not only for assessing the investment climate in rare earth and critical mineral jurisdictions, but also for anticipating long-term supply security, downstream integration opportunities, and the policy risks that can influence market pricing, project viability, and global trade flows.

Key Findings

The authors argue that many mining-related industrial policies fail because they are developed in isolation, without accounting for the interdependencies of global value chains (GVCs), which makes a lot of sense based on our unfolding knowledge.  In this case, the authors’ taxonomy classifies policy tools along two axes—demand vs. supply measures, and market-based interventions vs. public goods provision—and stresses that effectiveness depends on balancing these quadrants.

So they apply the framework to case studies in Australia, South Africa, and Chile and in the process, the researchers find substantial variation:

Nation	Summary
Australia	Prioritized supply-side R&D, skills, and technology infrastructure, leveraging an existing industrial base and global mining headquarters presence
South Africa	Combined supplier development and manufacturing equipment clusters with strong local content mandates, aiming for both economic upgrading and socio-economic transformation
Chile	Took a lighter-touch approach until recently, relying mainly on private-led supplier programs, but is now moving toward more vertical strategies in lithium and innovation policy

Across all cases, policies targeting specific GVC segments—such as mining services, capital equipment, or specialized technologies—were most effective when complemented by measures that stimulated demand and built supplier capacity.

Possible Implications

For governments and industry stakeholders in the critical minerals sector, the taxonomy provides a practical design tool to avoid mismatches—such as imposing local content rules without building local skills, or subsidizing innovation without ensuring a stable market. For investors, it offers a lens to assess whether host-country policies are likely to create a competitive, reliable supplier base or generate bottlenecks.

In an era where critical minerals underpin the green and digital transitions, the study’s GVC-oriented perspective underscores the importance of targeting high-value, technologically intensive segments, while fostering both upstream and downstream linkages. This is particularly relevant for jurisdictions seeking to move beyond raw material extraction into processing, equipment manufacturing, and knowledge-intensive services.

Limitations

The authors note that their analysis is based on three countries over a defined pre-pandemic time frame and focuses on policy design, not empirical policy outcomes. They acknowledge that effectiveness also depends on historical, institutional, and political factors beyond the study’s scope. Future research is needed to test the taxonomy in other contexts, track implementation over time, and address emerging dynamics—such as long-term concessions for critical minerals in geopolitically strategic jurisdictions.

Final Thoughts

This research provides a structured way to design coherent mining industrial policies that align with global value chain realities. For countries aiming to capture greater value from critical minerals, the message is clear: balance is key. Demand-side incentives must be matched with supply-side capability building, and both should be grounded in a deep understanding of the specific GVC segments where competitive advantages can be developed and sustained.

Citation: Anzolin, G., & Pietrobelli, C. (2025). Industrial policy along the mining value chain: a new taxonomy and case studies. Journal of International Business Policy. https://doi.org/10.1057/s42214-025-00221-x (opens in a new tab)