Resource Nationalism in Africa Threatens Foreign Mining Investments
A growing number of African governments are tightening control over strategic mineral resources through new taxes, local ownership rules, and license revocations, creating significant new risks for foreign investors.
Several African nations, including the Democratic Republic of the Congo, Mali, Zambia, and Ghana, are increasingly asserting sovereign control over their natural resources, particularly minerals critical for the global energy transition. This wave of 'resource nationalism' includes measures such as increasing royalty rates and taxes, mandating higher state or local shareholdings in mining projects, banning the export of unprocessed minerals to force domestic refining, and, in some cases, cancelling licenses and nationalizing assets.
For foreign investors and multinational corporations, this trend significantly increases political and financial risk, threatening the stability and profitability of existing and future projects. It creates supply-chain uncertainty for key commodities like cobalt, lithium, and bauxite and heightens the likelihood of complex, high-stakes disputes between investors and host states. Counsel should advise clients to proactively structure investments to gain protection under bilateral investment treaties, negotiate contractual stabilization clauses, and consider political risk insurance. Given ongoing economic and political pressures, this trend is expected to continue, likely spurring an increase in investor-state arbitrations.