Growing competition for critical minerals is increasing state involvement in mining and raising questions over investor protection and potential disputes, experts said Thursday at Istanbul Arbitration Days. The issue was at the center of a panel on resource nationalism and the critical-minerals race and experts discussed issues ranging from enforcement and cross-border proceedings to costs, technology and the future of international arbitration.

Berceste Elif Duranay, founding partner at Duranay Law, said resource nationalism was not new, but the strategic importance of minerals and the speed of government responses had changed significantly. She said the energy transition had created enormous demand for critical minerals. Vulnerabilities exposed by the COVID-19 pandemic and geopolitical developments since 2022 had also changed how governments viewed access to energy and raw materials, she said. Critical minerals are increasingly being treated as strategic assets rather than simply commodities, Duranay said.

Cem Kalelioglu, a partner at Pinsent Masons, said governments worldwide were increasingly using measures ranging from state ownership in mining investments to export restrictions and local-content requirements. Such measures did not necessarily lead to investor-state arbitration, he said, adding that much depended on how governments implemented new rules." If they are implemented in a discriminatory, arbitrary way ... I think that will lead to a lot of investor-state arbitration," Kalelioglu said.

He added that laws being enacted could keep arbitration practitioners busy over the next decade. Dogan Eymirlioglu, head of arbitration at Balcioglu Selcuk Eymirlioglu Ardıyok Keki Attorney Partnership, said states had broad room to regulate critical minerals for purposes including national security, energy transition, environmental protection and industrial development. But regulation should be clear, prospective and generally applicable, Eymirlioglu said.

Measures that become confiscatory, discriminatory, arbitrary, retroactive or contrary to specific commitments made to investors could create treaty liability, he added. Ismail Pilavci, head of legal affairs at Oksut Madencilik, highlighted the long-term nature of mining investments, saying investors could reasonably expect a degree of regulatory stability. Pilavci also stressed the importance of maintaining dialogue with governments when disputes arise. Investors should protect their legal position while seeking to preserve a constructive relationship with regulators, he said. Eduard Saura, a partner at Accuracy, said valuation in critical-minerals disputes was complicated by uncertainty over prices, technology and future demand, particularly for projects still years away from production.

'Promote and support regional centers such as Istanbul' In a keynote address later Thursday, Khawar Qureshi KC, head of McNair International, said international arbitration was at a "critical crossroads." He identified neutrality, technology, and cost and delay as key challenges facing the field. Qureshi said geopolitical developments were creating difficulties for some parties in accessing established arbitration centers and called for greater flexibility. Pointing to Istanbul's position at the crossroads of Europe and Asia and its longstanding role as a bridge between different cultures, Qureshi said the city's importance was growing amid disruptions affecting key routes for international trade."

We should each and every one of us promote and support regional centers such as Istanbul," he said. Qureshi said competition among arbitration centers was healthy and regional centers were increasingly important.