Geology sets the resource base, but geopolitics increasingly dictates NPV through risk-adjusted discount rates—adding 5-7% premiums for high-risk jurisdictions like DRC versus stable ones like Chile or Nevada(Rethinking NPV: Critical Mineral Valuation Challenges, n.d.).
Geopolitical fragmentation—ranging from the Ukraine conflict to Middle East tensions and coups across Africa—is amplifying risks beyond underlying market fundamentals, driving up financing costs and compressing long-term cash flows in 2026 projections(Mining Investment Tightens as Geopolitics and Oversupply Shape 2026 — Wood Mackenzie – The Oregon Group – Critical Minerals and Energy Intelligence, n.d.).
Even top-tier deposits can lose value when trade barriers, tariffs, or resource nationalism increase capex by 20–30% or delay permits, undermining returns. Conversely, stable geopolitical environments can unlock strategic premiums, like the EU’s 3% rate cuts to secure critical supply. Such stability reduces risk, accelerates approvals, and enhances long-term cash flow, making geopolitics as crucial as geology in shaping project NPV.
Reference:
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Mining investment tightens as geopolitics and oversupply shape 2026—Wood Mackenzie—The Oregon Group—Critical Minerals and Energy Intelligence. (n.d.). Retrieved February 24, 2026, from https://theoregongroup.com/commodities/copper/mining-investment-tightens-as-geopolitics-and-oversupply-shape-2026-wood-mackenzie/
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Rethinking NPV: Critical Mineral Valuation Challenges. (n.d.). Retrieved February 24, 2026, from https://discoveryalert.com.au/npv-mining-valuation-2025/
