Highlights

• By 2035, copper demand could outstrip supply by 30%.
• China controls over 70% of global mineral refining capacity.
• Three innovative financial frameworks proposed:
  • Syndicated Investment Model
  • Revolving Loan Fund
  • Blended Finance Fund
• Current financing models are inadequate for long-term mining projects.
• New approaches are required to attract investment and support sustainable development.

---

A new Milken Institute report by Ashley Campany (opens in a new tab) and Kanika Singh,“Innovative Financing for Resilient Critical Mineral Supply Chains” (Sept. 2025), argues that without fresh financial models, Western nations risk falling further behind China in securing the minerals that power the global economy.

Key Findings

The report underscores the gap between soaring demand—fueled by EVs, renewable energy, AI, and defense—and fragile supply chains dominated by China. By 2035, copper demand alone could outstrip supply by 30%. China, leveraging its Belt and Road Initiative, now controls 70% or more of global refining capacity for 19 of the 20 most critical minerals.

Price manipulation—such as deliberate oversupply of nickel and lithium—has undercut Western competitors and stalled projects.

Traditional financing, the authors argue, is poorly suited to this sector. Private equity and venture capital are volatile, favoring quick returns, while mining projects average 17+ years from discovery to production. Permitting delays, ESG controversies, and community opposition add further hurdles.

To break the logjam, the Milken team proposes three innovative frameworks:

• Syndicated Investment Model (SIM): Pooling capital from family offices, sovereign wealth funds, and climate funds to bridge the “valley of death” in mining innovation. Rare Earth Exchanges has suggested such types of creative structures. In fact, we are working on an exciting framework for a new form of “Liberty” security.
• Revolving Loan Fund(RLF): Extending credit to host communities—particularly Indigenous and Tribal Nations—to align economic incentives and secure the “social license” to operate.
• Blended Finance Fund: Utilizing concessional public capital, guarantees, and insurance to de-risk projects and attract private investors.

Implications

If adopted, these models could lower barriers to capital, improve ESG outcomes, and encourage long-term investment in domestic and allied supply chains. The emphasis on community equity and innovation also signals a shift toward more inclusive and sustainable mining. For investors, it means new instruments—green bonds, off-take backed equity, venture debt—could become mainstream in mineral financing.

Critical Limitations

Yet the proposals remain largely aspirational. None directly tackles slow permitting regimes or entrenched environmental conflicts, which are just as likely to stall projects as financing gaps. Syndicated and blended funds also depend on political will and coordination—areas where Western governments have faltered compared to China’s centralized, state-driven approach. Finally, the assumption that institutional investors will embrace long-tenor, ESG-heavy models remains untested.

Conclusion

The Milken Institute provides a thoughtful blueprint for rethinking mineral finance. But without parallel reforms in permitting, environmental regulation, and industrial strategy, innovative funds may not be enough to counter China’s entrenched dominance. For Rare Earth Exchanges readers, the critical question is whether these frameworks will move beyond whitepapers into binding capital commitments. Until then, China’s grip on critical minerals remains firm.

Source: Ashley Campany & Kanika Singh, Milken Institute Finance, Innovative Financing for Resilient Critical Mineral Supply Chains (opens in a new tab), Sept. 2025

©!-- /wp:paragraph -->