Sourced fact
The News
Growing competition for critical minerals is driving governments to increase their intervention in the mining sector and raises questions about investor protection and the potential for conflicts, according to experts at the Istanbul Arbitration Days event. This issue formed the core of a panel discussion on national resources and the race for critical minerals. Perys Tselilif Duranay, a founding partner at Duranay Wiel, noted that national resources are not new, but the strategic importance of minerals and the rapidity of government responses have changed significantly. She added that the transition to renewable energy has created a huge demand for critical minerals, while crises such as the COVID-19 pandemic and geopolitical developments have altered governments' perspectives on access to energy and raw materials.
Jim Calioglu, a partner at Pinsent Masons, said that governments around the world are increasing the use of measures that include government ownership in mining investments, export restrictions, and local content requirements. He added that these measures do not necessarily lead to investor-state arbitration, but noted that the way new rules are applied will be crucial. "If they are applied in a discriminatory or arbitrary manner, I believe this will lead to a lot of investor-state arbitration," Calioglu said.
Dogan Emirlioglu, the arbitration partner at Balikoglu Seljuk Emirlioglu Ardicoglu Kiki, pointed out that countries have a wide scope to regulate critical minerals for purposes including national security, the energy transition, environmental protection, and industrial development. However, he noted that regulation should be clear, predictable, and non-discriminatory, adding that measures that become arbitrary, discriminatory, or retroactive may give rise to treaty-based liability.
Analysis & context
Analysis & Context
Analytically, critical minerals have become a key element in the global economy, particularly with the transition to renewable energy. In a broader context, governments face challenges in ensuring the availability of these materials while attempting to protect their national interests. The importance of international arbitration in resolving disputes between international investors and governments is highlighted, especially in light of rapid changes in government policies. It is also noteworthy that arbitration centers like Istanbul are gaining increasing importance in the face of geopolitical challenges faced by some countries in accessing traditional arbitration centers.
