Report: 40% of Banks fail to screen for illegal mining risks in high risk sectors

Many banks and investors are failing to screen for illegal mining risks, even while operating in high-risk sectors, according to a report by the World Wide Fund for Nature (WWF) and financial crime risk platform Themis.

The study, shared with Reuters, found that about 40% of surveyed financial institutions do not check for illegal mining risks as part of their due diligence, despite 84% operating in at least one high-risk sector, such as transport or transit.

Based on a survey of 647 institutions across 22 countries, the report noted that minerals are often shipped overseas in containers—fewer than 2% of which are inspected—creating opportunities for illegally mined resources to enter global supply chains.

New Opportunities for Organised Crime
“One respondent noted clients mislabelling precious stones as ‘apparel’ to avoid audits, highlighting a known loophole,” the report said.

Illegal mining is estimated to generate at least $48 billion annually in criminal proceeds, linked to offenses including environmental and sanctions breaches, money laundering, corruption, tax evasion, and terrorist financing.

Rising prices for metals such as copper, gold, and silver, along with stronger demand for minerals used in electric vehicles and data center infrastructure, are creating new opportunities for illicit extraction networks.

Illicitly mined resources, such as gold or cobalt, can be integrated into global supply chains and sold through legitimate markets, making the sector attractive to organized criminal groups seeking revenue and a means to launder proceeds.

Banks and investment firms may be exposed through activities including trade finance, lending to mining companies, commodity trading, and investment portfolios, the report said.

It added that better screening tools, staff training, and greater supply chain transparency could help financial institutions identify transactions linked to illicit mining.

Reporting by Clara Denina