Resource tensions in Africa: what can you do?

Introduction

"Governments are taking over private enterprises and resources at the fastest pace in 50 years. Based on the past century’s multiple waves of nationalizations, this shift will alter the world’s economic landscape."

Nicholas Mulder, The New Wave of Nationalization, Finance & Development (IMF), June 2026  

Natural resources, particularly those found on the African continent, have become increasingly vital for the energy transition and the technological revolution (including artificial intelligence).¹ This has led to a number of African states implementing tighter controls over their natural resources and foreign entities' access to them. Some refer to this as "resource nationalism"; others prefer a less politically loaded term such as "resource sovereignty".

This forms part of a pattern of nationalisations and government interventions which has been termed "the fourth great wave of nationalizations in the past 100 years".²

This article considers how recent and future measures may impact you as a foreign investor in Africa, what protections are available, and how disputes can be resolved. We look first at some of the issues investors have faced, and then how you can mitigate your risk.

Resource tensions in Africa today

In recent years, there has been an increase in resource tensions in Sub-Saharan Africa. This has in part been caused by the increased importance of critical minerals for the energy transition – for example, cobalt, lithium, nickel and bauxite and the so-called "rare earth" elements, and the concentration of production in a limited number of African states.³ For example, Guinea has the largest global reserves of bauxite, a mineral essential to batteries, wind turbines and solar panels. Democratic Republic of the Congo (DRC) is the largest producer of cobalt, a critical component of lithium-ion batteries.⁴

In response to the demand for such minerals, some states have sought to impose mechanisms to protect the exploitation of their resources. The reasons for such measures are mixed. Some are driven by political objectives, such as a rise in nationalist sentiment and an aspiration to take back control of local resources in the hands of foreign companies. Others occur where governments implement measures in a bid to increase government control, raise local revenue or mitigate social unrest. Inflation, political instability and greater global demand for specified commodities are frequently the backdrop for such decisions. Measures may also be aimed at fighting illegal mining.

Recent examples in Sub-Saharan Africa include:

Increased royalty rates or taxes on companies operating in the mining industry

• In 2022, Zambia enacted the Mines and Minerals (Amendment) Act No. 29 of 2022, modifying the mineral royalty tax levels and thresholds on copper, thereby increasing tax rates applicable where the norm price of copper is over $ 4,000 per ton.⁵
• In March 2025, the Government of Mali announced fiscal reforms which notably involved extending the special tax on certain products (ISCP) from gold bars and marble to other mining products and broadening the scope of stamp duty on export intentions to all mining products.⁶
• In 2018, DRC revised its mining code to increase royalty rates on most minerals and introduced a 10% royalty on minerals which are "strategic substances".⁷
• In March 2026, Ghana abandoned its flat 5% gold royalty in favour of a price-tied, floating rate of up to 12%.⁸

Minimum state shareholding rights or indigenous shareholding rights

• In 2024, Burkina Faso's new mining code took effect, increasing state control by granting the government a 15% free-carried interest stake, which cannot be diluted, when granting industrial exploitation permits, with a separate right to acquire a further 30% contributing share.⁹
• In 2023, Mali adopted a new mining code and increased state participation in mining companies. The government's optional participation was increased from 10% to 20%. Additionally, a 5% interest must be transferred to the state for allocation to local investors. Together with the state's 10% free-carried interest stake, this can potentially bring state and local shareholdings to 35%, an above-average proportion when compared with laws enacted in other African states.¹⁰
• In 2022, Uganda's new Mining and Minerals Act came into force, giving the government a free non-dilutable shareholding of up to 15% in medium and large-scale mining projects.¹¹

Minimum requirements for local sourcing of goods, labour and services, or bans on the export of unprocessed minerals (requiring processing to take place domestically)

• In June 2025, DRC announced the extension of its ban on cobalt exports initially imposed in February of that year, although this was subsequently lifted.¹² In 2025, Gabon adopted an export ban on unrefined manganese from 1 January 2029.¹³
• In 2023, along with its new mining code, Mali introduced legislation on local content requirements in the mining sector. Subject to limited exceptions, refining and processing of mining products must take place in state-owned facilities located in Mali, goods and services for mining operations must be provided by Malian subcontractors, and mining activities must be insured by locally approved insurers. Where, in exceptional circumstances, a foreign subcontractor provides such services, they must set up a local company which grants a minimum of 35% shareholding to Malian persons. Companies must also progressively reduce foreign employment with the aim of ultimately reaching full Malian employment.¹⁴
• Tanzania's Mining (State Participation) Regulations 2022 contain several local requirements for mining joint ventures with the government, such as preferential appointment of Tanzanians to management positions.¹⁵
• Uganda's Mining and Minerals Act 2022 imposes local content requirements through an obligation to give preference to goods and services produced in Uganda, or produced by a Ugandan-owned company, as well as the employment of Ugandans.¹⁶
• In 2022, Zimbabwe banned the export of unprocessed lithium, subject to some exceptions.¹⁷ In January 2023, this was subsequently expanded to cover all unprocessed mineral ores.¹⁸

Cancellation of licences and nationalisation of assets

• Burkina Faso has recently nationalised mining assets, including two large gold mines.¹⁹
• In 2024, Niger revoked mining licences from French company Orano and Canadian company GoviEx Uranium.²⁰ It nationalised a joint venture with Orano with reference to France being an "openly hostile state".²¹
• In May 2025, Guinea's government cancelled numerous mineral exploitation and exploration permits.²²
• In 2026, Ghana opted not to renew the mining licence over the mature Damang mine, instead awarding mining rights to a national firm. Against the backdrop of increased regulations and government demands, talks are also reportedly ongoing to transfer control of the Tarkwa gold mine to a national firm.²³

The impact of government measures on foreign investors

Government measures targeting resources sectors can significantly affect your investment. Understanding what you can do is critical. You have several options to mitigate exposure. The right approach depends on your particular circumstances. Formal dispute resolution may be justified, but it is rarely the first option.

• Host state investment laws. The laws of the host state may provide protection for foreign investors, although reliance on such laws can be less productive when the host state itself has implemented the measures giving rise to your complaint.
• Investment contracts. You may conclude a contract directly with the host state or a state-owned entity in the form of a licence or concession. Consider negotiating clauses that protect you if there is a change in law or regulation which adversely affects your interests (known as a stabilisation clause). You should also reference any relevant bilateral investment treaties (as described below) in the contract and confirm that you qualify as an "investor" and the contract qualifies as an "investment" for treaty purposes. These contracts typically provide for international arbitration as the method of dispute resolution.
• Political risk insurance. You can insure against risks such as certain changes in law or regulation, although such insurance can be expensive. Insurance providers often look for existing investment treaty protection which, ideally, includes a subrogation clause allowing the insurer to step into your shoes for the conduct of any dispute with the host state.
• Political lobbying or strategic litigation or arbitration. This approach allows you to influence policy or demonstrate resolve. Examples include attempts to influence the draft Mineral Resources Development Bill in South Africa²⁴, Indiana Resources' claim against Tanzania in response to legislative measures that resulted in the cancellation of licences²⁵, and Barrick's ICSID arbitration against the Malian government over the seizure of mining operations and extracted gold at Loulo-Gounkoto following the enactment of its 2023 mining code.²⁶
• Dialogue with key decision makers. Identify the key decision makers and people of influence. Who are the right people to speak to within government (at local or regional level) and outside it? Early dialogue can help facilitate a positive outcome.
• Engaging with government. You can engage with government in different ways, depending on the circumstances. Successful approaches include direct negotiation, working through local intermediaries, civil organizations, and diplomats (both serving and non-serving).
• Opportunity identification. Consider future investment opportunities or value-sharing arrangements that benefit the government. These can help resolve ongoing or anticipated disputes.
• Treaty protection. One of the most effective ways to protect your investment is to ensure an investment treaty exists between the host state and your home state.
  
  The most common treaties are Bilateral Investment Treaties (BITs) and Multilateral Investment Treaties (MITs). These treaties offer varied protections, typically including:

• protection against unlawful expropriation;
• guarantee of fair and equitable treatment (FET);
• guarantee of full protection and security for investments; and
• protection against discrimination on the basis of nationality.
  
  For example, if a government cancels mining permits arbitrarily, discriminatorily, or without due process, you may have grounds to bring claims for compensation under the relevant investment treaty.
  
  If no treaty exists between the host state and your home state, you may be able to route your investment through a state that does have a treaty in place. However, structuring an investment to protect against an existing or foreseeable dispute may not attract treaty protection. Take care with this option, and seek advice.
  
  Most treaties provide for disputes to be resolved by international arbitration, often under the rules of the International Centre for Settlement of Investment Disputes (ICSID) – part of the World Bank Group. Arbitration is preferable to domestic courts, where judges may favour the host state or where justice may be difficult to obtain in practice. An international arbitration award is also more readily enforceable globally than a domestic court judgment.
• Enforcement. Fundamental to the effectiveness of most of the protections listed above is the enforcement of an investor's rights should the host state breach its obligations under the relevant treaty or contract. Think about enforcement options before starting any arbitration.

The future

Africa is rich in key minerals and resources. As more countries adopt protectionist measures, investor-state disputes will increase. Recent coups d'état and government changes in West Africa (Burkina Faso, Guinea, Mali and Niger), combined with economic and possible future inflationary pressures, suggest this risk will endure.

Stay informed about these developments. Understand your options to mitigate investment risk. This will place you in the best position to successfully develop, and protect, your interests in Africa.

Authors: Myfanwy Wood, Partner and Tom Cummins, Senior Counsel.

The authors thank Charlotte Cattaneo and Edvin Morell for their assistance with this article.