The water footprints of the global minerals trade

Why the ‘virtual water’ use hidden in supply chains is critical to sustainability

Research paper

Published 13 August 2026

ISBN: 978 1 78413 678 9

Phesheya Nxumalo

Research Associate, Sustainability Accelerator, Environment and Society Centre

Ruth E. Mathews

Founder and Principal, Currents Converge

Water use in the production of minerals represents an underappreciated risk to national resilience in both producer and consumer countries. Unsustainable water practices can cause severe local shortages and environmental impacts, with knock-on effects for the stability of supply chains.

This paper examines how governments and mining companies can balance the need to protect affected communities from the adverse water-related impacts of mining with the economic opportunities presented by mineral extraction and processing.

DOI: 10.55317/9781784136789

Summary

The extraction of minerals central to the technologies driving global economic growth is a significant contributor to water scarcity and pollution, with severe risks to the ecosystems and communities near mining sites. Through the ‘virtual water’ embedded in minerals and their final products, global supply chains link consumers to the social, environmental and economic impacts of water use in producer countries. This paper explores the steps governments, businesses and consumers can take to protect water resources and boost mineral supply-chain resilience.
Governments of mineral-rich countries face a difficult choice in balancing competing priorities: safeguarding local communities and the environment on the one hand, while maximizing the economic benefits of mineral resources on the other. Extractive activities can exacerbate existing environmental pressures and water scarcity, increasing the risk of local disputes that can threaten mining operations and the reliability of mineral supply chains.
Fair virtual water governance is critical to global sustainability efforts and resilient mineral supply chains. Ensuring sustainable, equitable and efficient direct and indirect water use in mining depends on collective action by companies, governments in producer and consumer countries, financial institutions and civil society to strengthen governance and improve water stewardship.
Inclusive, integrated approaches to water use that reflect the needs of local populations – particularly women, children, Indigenous peoples and other marginalized groups – are most effective in ensuring both local buy-in and stable extractive operations. In contrast, failure to prioritize inclusive engagement can worsen social and systemic inequalities with negative implications for public health, the well-being of neighbouring communities, mining operations and even political stability.
Strengthened water governance is critical to avoiding financial losses and supply-chain risks associated with water stress – and is a decisive factor in whether mining activity protects the water-security needs of communities, businesses and ecosystems. Such oversight is vital to securing the stability of mining and mineral supply chains and is crucial to societal and community acceptance of mining activities.
As part of the Fair Water Footprints Initiative, this paper explores the water-related challenges associated with mining, and calls for collaborative action on water security between supply-chain actors and host communities for improved water governance. While the current geopolitical context makes progress more challenging, sustainable water governance in the mining sector can be boosted through:
- Governments requiring comprehensive basin-level, cross-sectoral assessments of water quality and quantity to ascertain the true economic, environmental and social value of water. Authorities should also integrate drought and flood planning into permit systems and strengthen coordination between ministries responsible for water, agriculture, energy, industry, the environment, economic development and finance.
- Mining companies closely monitoring and reporting on water consumption and contamination in order to calculate water footprints, while implementing robust mining waste management, risk-based due diligence, independent audits to support transparency and accountability, and emergency planning.
- Collaboration between companies and governments to ensure environmental and human rights safeguards, as well as meaningful participation (including free prior and informed consent) of affected communities and Indigenous peoples in decision-making and benefit-sharing agreements. This cooperation should allow fair and timely access to information and dispute resolution mechanisms.
- A combination of mandatory international and national measures (such as environmental permitting regulations and directives) and voluntary standards that stipulate inclusive stakeholder engagement, expand transparency and accountability, promote best practice and drive improvements in the sustainability, equitability and efficiency of activities related to mining.
- Investors and financiers integrating water and climate risks into more reliable and comprehensive credit and market models, stress-testing portfolios against water scarcity, pollution and extreme weather events and making operational resilience a condition of capital supply.
- A whole-of-supply-chain approach with producer- and consumer-country governments, downstream industries and consumers demanding responsibly sourced minerals that conform to social, environmental and mining waste management standards, while investing in recycling and circularity to reduce primary demand.

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About us

The water footprints of the global minerals trade

Phesheya Nxumalo

Ruth E. Mathews

Summary