WEST Africa, home to some of the world’s richest mineral reserves, is undergoing a seismic shift in its mining sector. The recent actions of military governments in Mali, Burkina Faso, and Niger are upending traditional mining dynamics, unsettling Western companies, and sparking debates on economic sovereignty and geopolitical alliances. This transformation highlights the intersection of political instability, resource control, and global economic interests.
A growing unease among Western miners
Foreign mining companies operating in Mali, Burkina Faso, and Niger are increasingly under pressure. Arrests of executives, threats to revoke permits, and the recent seizure of a French-operated uranium site in Niger have created an environment of uncertainty. Though daily production remains largely unaffected, the long-term impact on investment and operational security looms large.
‘We wouldn’t invest in Mali now,’ admitted a Western fund manager, reflecting the apprehension among investors. Record gold prices have made mining operations in the Sahel an attractive target for revenue-hungry juntas.
The military regimes, which came to power through coups, are renegotiating mining contracts to secure greater revenue shares. These moves coincide with a broader geopolitical shift as these nations pivot away from traditional Western allies such as France and the United States, increasingly engaging with Russia.
Rising tensions amid gold and uranium booms
The Sahel’s mineral wealth is undeniable. Mali, Africa’s second-largest gold producer, accounted for over 100 metric tons of gold output in 2022. Together with Burkina Faso and Niger, these nations represent a quarter of Africa’s gold production. In addition, Niger’s uranium reserves are critical to global energy markets.
The soaring prices of gold and uranium have emboldened military governments to demand a larger share of the profits. Mali’s junta, for example, has introduced a new mining code and initiated audits of foreign companies, claiming back taxes and renegotiating contracts. Companies like Australia’s Resolute Mining and Canada’s Barrick Gold have faced mounting scrutiny, with executives detained and substantial tax demands issued.
The new approach aims to rectify what governments perceive as historical inequalities. A Malian official stated that the revised mining code seeks to balance national interests with industry sustainability. However, the unpredictability of such measures has made foreign investors wary. ‘Due to the geopolitical context for investments in Mali, the market of potential buyers is currently very limited,’ noted Canada’s Robex Resources, which is struggling to sell its Malian assets.
The Russian factor
Amid strained relations with Western nations, Mali, Burkina Faso, and Niger are fostering closer ties with Russia. While there is no evidence of Russian companies actively taking over mining operations, the presence of Russian military and diplomatic support in these countries cannot be ignored. Analysts caution that the juntas’ shift towards Moscow could alter the region’s mining landscape over time.
A senior mining official in West Africa remarked that the implicit message to Western companies is clear: ‘If you don’t comply with our terms, we have other options.’
Insurance and financing challenges
The instability is also affecting the financial backbone of the mining sector. Insurance premiums for projects in West Africa have nearly tripled since 2019. Financiers and insurers are becoming increasingly cautious, further complicating operations for companies already navigating political and security risks.
‘The challenges in the Sahel are distinct but don’t necessarily apply to the entire region,’ Jeff Quartermaine, CEO of Perseus Mining, told Reuters. The Australian-listed company’s operations in Cote d’Ivoire and Ghana remain unaffected, highlighting the disparity between the Sahel and other parts of West Africa.
Implications for local economies
The juntas’ push for greater control over mining revenues stems from the desire to address economic inequalities. For decades, foreign mining companies have been accused of extracting wealth without adequately benefiting local communities. The revised mining policies aim to redirect profits towards national development.
However, the approach comes with risks. The abruptness of policy changes and the crackdown on foreign operators may deter future investments, potentially stalling economic growth in the long term. Countries like Burkina Faso, which recently sold two gold mines to its government for a fraction of their earlier valuation, illustrate the tension between immediate revenue needs and sustaining investor confidence.
A new era for mining in Africa
The developments in Mali, Burkina Faso, and Niger are reshaping the mining narrative in West Africa. These nations are asserting their sovereignty over their resources, challenging the dominance of foreign corporations, and redefining the terms of engagement. While this may inspire similar movements across the continent, it also raises questions about the future of investment and the balance between economic nationalism and global collaboration.
As the region’s mineral wealth continues to draw global attention, the stakes are higher than ever. The actions of these military governments serve as a reminder that Africa’s resources are not just commodities but also instruments of power, negotiation, and identity. How these dynamics evolve will have far-reaching implications for the continent’s role in the global economy.
