Complex pattern of nexus between global mining consortiums and sustainability in the Middle East and North Africa region

Abstract

This research investigates the intricate interplay between major global mining entities and sustainability initiatives in the Middle East and North Africa (MENA) region, as a key part of Global South countries. The study conducts a comprehensive analysis of the global mining industry at five distinct levels: mining, mining cap-weighted, mining coal exclusion, global gold mining tracker, and global electrification minerals mining. The objective is to comprehend the multi-fractal patterns and implications of their interconnectedness with sustainability and conventional investments. By employing a time-varying parameter vector autoregressive (TVP-VAR) approach to identify the degree of nexus between each pair consisting of a mining index and sustainability or conventional investments, and utilizing the generalized Hurst exponent of a multiscale multi-fractal analysis (MMA) from September 18, 2017, to July 3, 2023, the study reveals that none of the bi-variate interconnectedness adheres to a random walk process, thereby confirming their inefficient behavior. The level of efficiency among pairs varies, demonstrating heterogeneity across the connections. The analysis indicates a relatively lower level of inefficiency in pairs of pairwise connectedness indices (PCIs) related to sustainable investments compared to conventional investments. Generally, conventional investments exhibit more distinct trends or predictability over various time scales, suggesting a less complex and unpredictable pattern compared to sustainable investments. Additionally, the persistence level in PCIs linked to conventional sustainable investments is higher than that of sustainable investments, implying that conventional investments have more predictable associations with mining consortiums. These findings provide valuable insights into the dynamic relationships between global mining entities and sustainability initiatives in the MENA region, with implications for investors, policymakers, and industry stakeholders. The clarity observed in connectivity patterns with conventional investments presents strategic opportunities for investors, potentially influencing regulatory adjustments for sustainable resource governance. The identified inefficiencies create opportunities for refining risk management tools and optimizing investment strategies. Furthermore, the study highlights the stability of connections between conventional sustainable investments and mining consortiums over time, providing guidance for long-term planning and risk mitigation.