Indigenous Co-Ownership in the Mining Sector

The mining industry has a history of violating Indigenous rights. For centuries Indigenous communities have been fighting against the adverse environmental and social impacts of resource exploitation on their territories. Often with little success. As the mining sector constitutes the very start of most industrial value chains, its power and political backing are unsurprising. And yet, the maltreatment of local communities and the environment has resulted in the mining sector becoming the industry with the worst public perception in the world. 

At the same time, the mining industry remains crucial to the energy transition. Both electrification and the expansion of renewable energy capacity require staggering amounts of so-called critical minerals. The demand for lithium, for instance, is projected to increase sixfold over the next 15 years. This raises difficult questions about where and under what conditions these minerals should be extracted.

A study by the University of Queensland estimates that 54% of mining projects worldwide that extract minerals required for clean energy are located on land owned by Indigenous  communities. This raises the question of how a ‘just energy transition’ can ensure fairness for the communities most affected by the growing demand for critical minerals. In the face of increased resource exploitation of their territories, Indigenous communities must have a genuine say in how their land is used. 

Indigenous groups are increasingly demanding more than compensation for the damage caused; they are calling for ownership of operations on their territories. This has given rise to new forms of collaboration between Indigenous nations and companies, where ownership shares are distributed between both parties, making them co-owners of mining operations. Is co-ownership a way to genuinely empower Indigenous communities and protect their human rights, or could it unintentionally legitimise environmentally and socially harmful mining practices?

The idea of Indigenous co-ownership

For decades, the relationship between mining companies and Indigenous groups followed a predictable script. The company would offer the communities a series of cash payments, known as royalties, in exchange for the right to extract resources from their territories. Although the Indigenous groups could invest this money in their communities, they acted as passive beneficiaries. The company had to secure their consent, negotiating a price until the Indigenous leaders agreed. Such payments were sometimes criticised as ‘shut-up money’. 

The concept of co-ownership completely changes the relationship between the mining operators and Indigenous communities. Rather than simply receiving money, communities acquire an equity stake in the company. In some cases, Indigenous groups buy into an existing company to hold the stake. Often however, a new company is formed specifically for operations on Indigenous lands in the form of a joint venture, with Indigenous representatives acquiring equity from the outset of the project.

By holding a stake in the company, Indigenous communities are assured a share of the profits, as well as a seat on the board. This elevates them from passive stakeholders who must be consulted on the project to active owners of the operations on their land. Along with voting rights on all of the mining company’s decisions, Indigenous groups gain access to data, plans and internal operational structures. Instead of fighting against exploitation in their territories, they are given the means to influence how it happens.

To see how this works in practice, we can look at the recent Kuska Lithium Project in Chile’s Antofagasta region. In May 2025, the Canadian company Wealth Minerals Ltd and the Quechua Indigenous Community of Ollagüe (CIQO) formed a joint venture company called Kuska Minerals SpA. This company is 95% owned by Wealth Minerals Ltd. CIQO holds 5% of the company. The Quechua community’s stake includes a 5% free-carried interest and is anti-dilution protected. This means that CIQO does not have to provide any of the initial funding, yet will still receive 5% of the dividends once the mine becomes profitable. Furthermore, their stake cannot be reduced by additional shares and will always remain at 5%. 

CIQO also holds one of the five seats on the Board of Directors. This gives them direct influence at the highest level of the company and access to confidential data. Still, the question remains: Does CIQO’s participation on the board actually change the company’s culture? 

It is generally difficult to assess the extent to which Indigenous co-ownership of projects changes company decisions. This depends on the Indigenous share and the context of the project. Nevertheless, it seems that projects with Indigenous equity components perform better in terms of sustainability. At the same time, even as minority stakeholders, Indigenous groups have a much more direct line to the operators, who, in turn, want to avoid internal conflicts. 

While the Kuska project could encourage Indigenous  co-ownership in South America, Canada has thus far become the global laboratory for these models, driven by a philosophy known as ‘economic reconciliation’. This growing landscape is spearheaded by the First Nations Major Projects Coalition (FNMPC), a non-profit collective representing over 170 First Nations across Canada’s recognised Indigenous communities as of 2026. The organisation supports its member First Nations in becoming co-owners of extractive projects by providing financial, technical and legal assistance.

The FNMPC oversees 21 diverse projects that include Indigenous equity components. Initially, banks often considered First Nations communities who wanted to invest in projects to be high risk, charging them interest rates of up to 35%. The FNMPC pools these risks and provides affordable loans. With the organisation’s support, First Nations communities can make informed decisions and negotiate effectively with mining companies. The projects demonstrate this: With the right infrastructure, support and legal status, Indigenous co-ownership is far from utopian.

The economics of Indigenous involvement

The Canadian scene demonstrates not only how feasible Indigenous co-ownership can be, but also how lucrative Indigenous participation can be for mining companies. In an interview with Mining.com, Mark Podlasly, the CEO of the FNMPC, said: ‘It’s not just an Indigenous  issue anymore, […] It’s about national economic competitiveness.’

Permitting procedures for companies that are partially owned by Indigenous communities often run via an extra-fast track. Moreover, having local communities on board as co-owners turns out to be an effective risk mitigation strategy and an excellent marketing tool. Data from the mining publisher Discovery Alert indicates that projects with genuine Indigenous  partnerships experience over 40% fewer operational disruptions than companies that lack them. After all, communities that own a stake in a project are far less likely to oppose it. 

At the same time, international investments in mining activities increasingly require comprehensive Indigenous engagement due diligence, as well as good environmental, social and governance (ESG) scores. Indigenous communities on the company’s board can often fulfil these requirements. Furthermore, Indigenous co-ownership enables the company to command price premiums of 3-8% for its commodities by labelling them as particularly socially sustainable. 

No one knows the territory better than the local communities who have lived and passed on their knowledge about their land for many generations. This could benefit the company. It is estimated that the traditional ecological knowledge brought to the table by Indigenous  groups could enhance exploration efficiency by 15-30%, thanks to an improved understanding of seasonal environmental variations, wildlife migration patterns and hydrological systems.

This demonstrates that indigenous co-ownership is not purely a matter of corporate responsibility. It can also create significant economic advantages for mining companies, making it a mutually beneficial alliance of convenience. Some therefore see such models as one possible way to reduce long-standing tensions around mining projects.

The complicity of Indigenous communities

While the idea of Indigenous people co-owning mining operations creates enthusiasm, there are increasingly critical voices emerging within Indigenous groups. By sharing their traditional knowledge with mining companies, providing legitimacy for their operations and thus enabling the company to sell the commodities for a premium price, are Indigenous communities making themselves complicit in the destruction of their own lands?

In a project focusing on lithium extraction in Chile, Germanwatch recently held an event in cooperation with the FAU Nuremberg and the International Federation of Human Rights (FIDH) to discuss the challenges of making lithium mining in the region more just and sustainable. In his talk, guest speaker José Aylwin shared what he calls the double-edged sword of benefit sharing. Aylwin is the director of the Chilean organisation Observatorio Ciudadano, which is also Germanwatch’s partner in the project. He has been dealing with human and indigenous rights in Chile’s mining industry for decades. 

On the one hand, Indigenous communities that participate in and benefit from resource extraction on their territories may gain a new school or hospital, or reliable jobs. On the other hand, as Aylwin describes, it can also put communities in a position of dependence. Indigenous people see themselves as protectors of their lands. However, when they directly profit from resource exploitation, they may be unable to point out the destruction that the industry carries with it. 

Just as diverse Indigenous groups are in their cultures and relationships with non-Indigenous society, so too are their attitudes towards their involvement in mining projects. As with many other issues, political questions often give rise to differing views within societies. In the case of Indigenous mining co-ownership, however, communities are particularly faced with the challenge of balancing economic opportunities with the protection of their social and cultural practices. This division can run through communities, with elderly members, for instance, opposing participation while younger ones seek the opportunities it provides. But it can also occur between different communities.

An example of this is currently unfolding in the Ring of Fire project in Ontario, Canada. The province has signed 40-million dollar deals with two First Nations to build a road network through Indigenous  territories and connect it to an outpost mining site. The Webequie and Martin Falls First Nations, who signed the deals, view the infrastructure and connection as their right to a dignified life, as their communities are currently dependent on air travel. However, other Nations, such as the Neskatanga, perceive the project as a threat to their communities’ environment and independence. Given the legitimacy that the former two Nations spearheading the project provided, the Neskatanga Nation had an especially difficult time trying to stop the project.

Should Indigenous equity be supported? And if so, how?

These cases show that indigenous co-ownership is not a magic bullet. Even when Indigenous groups are partially responsible for them, the adverse ecological and social effects of mining operations will often remain. Ultimately, the fight against the mining industry on Indigenous territories is a bigger and more complex issue than the distribution of a company’s shares. This is why it is essential to push for due diligence and economic justice. Alongside the question of ownership, there are numerous other forms of corporate accountability and Indigenous participation.

In the case of the Eskay Creek open-pit gold and silver mine in British Columbia, the provincial government and the First Nation’s Tahltan Central Government signed a Declaration Act Consent-Making Agreement for the project. This agreement not only established the one-time consent of the Tahltan Nation, but also constant monitoring of the agreed conditions by the Nation itself. The parties agreed upon 38 legally binding conditions to reduce adverse effects on the community and their ecosystem. Through permanent environmental and risk assessments, the Tahltan Nation continues to act as stewards of their land despite not having an equity stake in the operations.

Each case requires an individual solution that makes sense for the project and the communities involved. As acknowledged, opinions about participation and ideas about the role of Indigenous groups differ even within single Indigenous communities. However, the concept of Indigenous groups becoming co-owners of operations on their territories fundamentally alters the relationship between stakeholders. After a long history of Indigenous people suffering harm from mining operations, partial ownership of the projects certainly elevates Indigenous roles and recognition. 

Ownership models make the most sense for smaller, long-term projects that can limit their ecological impact and ensure an active role of Indigenous representatives. If communities are to invest in a project, they must have access to affordable loans, as well as the necessary information and advice to make an informed decision. The communities’ share should be special, accompanied by absolute veto power over decisions that directly impact their rights. These rights should be controlled by independent environmental and social assessments. To avoid complicity, the Indigenous government and regulatory council should not be funded in any way by the mine’s profits. All dividends should be earmarked for purposes within the communities. 

To ensure that Indigenous ownership can flourish under these conditions, national and local governments should provide Indigenous groups with the financial means to remain independent of mining profits, allowing them to maintain separate governance structures for their communities and their involvement in the company. The necessary funds could be obtained through mining company taxes. States could also offer Indigenous groups preferential low-interest loans. Laws should cement the right of Indigenous groups to free, prior and informed consent, even when they partially disagree with their own project, and should stipulate further due diligence. 

The enormous economic demand for critical minerals, especially for the green transformation, will lead to an expansion of global mining. This will in many cases occur in Indigenous territories. While communities have the right to withhold consent, deals will be made, and economic incentives will often prevail. For Indigenous communities, the question will often not be whether mining happens, but how it happens. Well-negotiated and well-supported Indigenous co-ownership models can be a potential tool for economic empowerment and greater justice for Indigenous people, should they choose this path. Under the right conditions, such models may provide Indigenous communities with greater decision-making power in the energy transition.