CLAUDE DE BAISSAC: The new mining in Africa game has no rules
Mining companies that fail to grasp the complexity of the new era risk being caught in the crossfire
02 February 2025 - 07:00
byClaude de Baissac
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Africa’s mining sector stands at the edge of a new and highly disruptive era, the writer says. Picture: 123RF
Africa’s mining sector is vital to the fortunes of the continent, central to the strategies of many mining companies, and key to strategic industries thanks to its vast reserves of critical minerals.
Today it stands at the edge of a new and highly disruptive era. Opportunities abound. But so do risks.
The end of an era
Intensifying and hardening geopolitical competition, the global race for strategic minerals and resurgent resource nationalism are fast converging. The cards are being redistributed, the rules redrawn, and the game itself is changing.
What is coming isn’t yet clear. But for all the shocking speed at which it is occurring, from the Democratic Republic of Congo’s (DRC) east to Mozambique and the Sahel, the parallels with the Cold War era are eerie.
The rules-based international order that triumphed after the Cold War undergirded the rise of complex value chains in a deeply integrated system of production spanning the globe. In the World Trade Organisation world, Africa acted first mainly as a supplier of commodities, and from the 2000s as an increasingly diversified market in its own right.
But as geopolitical competition hardens between the US and China, and new players join a chaotic table, the Washington Consensus that governed economic relations since the 1990s is giving way to a new reality: competing economic blocs, strategic chokepoints, and forced choices. While this process has been at play for more than a decade, 2024/25 is marking a sudden and pronounced acceleration.
Resource nationalism then and now
The parallels with the Cold War period are indeed striking. When Katanga attempted secession in 1977/78, Western powers supported its violent suppression to protect their access to strategic minerals. When the military junta in Mali seized Barrick’s assets, or the one in Niger expelled French interests late last year, they were exploiting the breakdown of Western influence and the protection offered by competing great powers such as China and Russia.
Back in the 1960s and 1970s some governments acted more like lawless plunderers while others followed more principled but counterproductive policies. Zambia’s 1970 nationalisation of its copper industry saw production collapse from 700,000 tonnes to 200,000 tonnes by 1995, costing by our estimate about $45bn in lost mineral rents. This is a track record similar in scope to that of Gécamines under Mobutu.
Strategic chokepoints and coercive power
A major difference between what is at play now and the Cold War is that China’s economy is far more competitive and sophisticated than the Soviet Union was. Connected to this is the hot competition for critical minerals, which is fundamentally reshaping global value chains and putting tremendous pressure on the mining industry to find and develop new mines.
Many of the key minerals are in Africa. This means governments of mineral-rich countries find themselves with tremendous leverage. But they also face tremendous threats. One is foreign interference similar to those prevalent when Western and Soviet governments enabled systematic looting of resources by kleptocratic elites protected by Cold War imperatives. The rapid advance of M23 rebels in North Kivu in an attempt to seize control of critical minerals, allegedly on behalf of Rwanda, has strategic minerals written all over it.
Another is misguided though well-intended policies that seek to force localisation of downstream processing where basic regulatory, infrastructure and economic conditions are patently absent. Nowhere in Africa have these policies worked, but this does not stop them from being put in place, decade after decade.
Yet another is the pressure new mines put on communities and the environment, given limited government capacity. The costs of global value chains are overwhelmingly concentrated upstream. We are likely to see a variety of blends of these afflictions take root. Donald Trump’s uncompromising America First policies — previewed during the “Colombia incident” to force compliance on deportation flights — serves as a severe warning about how he will use coercion to achieve his objectives.
Strategic minerals were the focus on an executive order on day one. African governments will face pressure through tariffs, market access and possibly more aggressive actions — either to force access to resources or punish actions deemed to favour adversaries. Vital aid has already been suspended. This heavy-handed approach will force countries to carefully calibrate their response.
Escalating competition for access to resources is thus likely to see China increase direct ownership of the mining industry from a surprisingly low 8% to far higher. Already, it controls more than 70% of cobalt mining in the DRC, including ownership of eight of the 14 largest cobalt miners. Chinese companies have invested $4.5bn in lithium mines across Africa in recent years, and are behind major projects in Namibia, Zimbabwe and Mali. This dominance extends beyond mining — China’s refineries account for 60%-90% of global cobalt processing capacity, creating strategic chokepoints in the global value chain.
Mining’s triple challenge
Western mining companies still dominate Africa’s mineral landscape — more than 70% of output and exploration. Canadian, Australian and British firms alone account for three quarters of exploration spend. They now face unprecedented challenges in the form of a triple threat. The stakes could not be higher.
Mining companies that fail to grasp the full complexity of this new era risk being caught in the crossfire. Success will demand elevating geopolitical and country risk management to strategic priority. Companies must fast transform how they gather and analyse intelligence, engage with stakeholders, manage security, and create shared benefits through meaningful local economic development. These traditionally siloed functions need to be redesigned as an integrated system that directly informs strategy and shapes operations.
This isn’t a matter of choice, nor just a matter of survival. It is a condition for future competitive advantage.
• De Baissac is founder and CEO of Eunomix, an advisory firm specialising in geopolitical and country risk management for mining and infrastructure companies operating in complex environments.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
CLAUDE DE BAISSAC: The new mining in Africa game has no rules
Mining companies that fail to grasp the complexity of the new era risk being caught in the crossfire
Africa’s mining sector is vital to the fortunes of the continent, central to the strategies of many mining companies, and key to strategic industries thanks to its vast reserves of critical minerals.
Today it stands at the edge of a new and highly disruptive era. Opportunities abound. But so do risks.
The end of an era
Intensifying and hardening geopolitical competition, the global race for strategic minerals and resurgent resource nationalism are fast converging. The cards are being redistributed, the rules redrawn, and the game itself is changing.
What is coming isn’t yet clear. But for all the shocking speed at which it is occurring, from the Democratic Republic of Congo’s (DRC) east to Mozambique and the Sahel, the parallels with the Cold War era are eerie.
The rules-based international order that triumphed after the Cold War undergirded the rise of complex value chains in a deeply integrated system of production spanning the globe. In the World Trade Organisation world, Africa acted first mainly as a supplier of commodities, and from the 2000s as an increasingly diversified market in its own right.
But as geopolitical competition hardens between the US and China, and new players join a chaotic table, the Washington Consensus that governed economic relations since the 1990s is giving way to a new reality: competing economic blocs, strategic chokepoints, and forced choices. While this process has been at play for more than a decade, 2024/25 is marking a sudden and pronounced acceleration.
Resource nationalism then and now
The parallels with the Cold War period are indeed striking. When Katanga attempted secession in 1977/78, Western powers supported its violent suppression to protect their access to strategic minerals. When the military junta in Mali seized Barrick’s assets, or the one in Niger expelled French interests late last year, they were exploiting the breakdown of Western influence and the protection offered by competing great powers such as China and Russia.
Back in the 1960s and 1970s some governments acted more like lawless plunderers while others followed more principled but counterproductive policies. Zambia’s 1970 nationalisation of its copper industry saw production collapse from 700,000 tonnes to 200,000 tonnes by 1995, costing by our estimate about $45bn in lost mineral rents. This is a track record similar in scope to that of Gécamines under Mobutu.
Strategic chokepoints and coercive power
A major difference between what is at play now and the Cold War is that China’s economy is far more competitive and sophisticated than the Soviet Union was. Connected to this is the hot competition for critical minerals, which is fundamentally reshaping global value chains and putting tremendous pressure on the mining industry to find and develop new mines.
Many of the key minerals are in Africa. This means governments of mineral-rich countries find themselves with tremendous leverage. But they also face tremendous threats. One is foreign interference similar to those prevalent when Western and Soviet governments enabled systematic looting of resources by kleptocratic elites protected by Cold War imperatives. The rapid advance of M23 rebels in North Kivu in an attempt to seize control of critical minerals, allegedly on behalf of Rwanda, has strategic minerals written all over it.
Another is misguided though well-intended policies that seek to force localisation of downstream processing where basic regulatory, infrastructure and economic conditions are patently absent. Nowhere in Africa have these policies worked, but this does not stop them from being put in place, decade after decade.
Yet another is the pressure new mines put on communities and the environment, given limited government capacity. The costs of global value chains are overwhelmingly concentrated upstream. We are likely to see a variety of blends of these afflictions take root. Donald Trump’s uncompromising America First policies — previewed during the “Colombia incident” to force compliance on deportation flights — serves as a severe warning about how he will use coercion to achieve his objectives.
Strategic minerals were the focus on an executive order on day one. African governments will face pressure through tariffs, market access and possibly more aggressive actions — either to force access to resources or punish actions deemed to favour adversaries. Vital aid has already been suspended. This heavy-handed approach will force countries to carefully calibrate their response.
Escalating competition for access to resources is thus likely to see China increase direct ownership of the mining industry from a surprisingly low 8% to far higher. Already, it controls more than 70% of cobalt mining in the DRC, including ownership of eight of the 14 largest cobalt miners. Chinese companies have invested $4.5bn in lithium mines across Africa in recent years, and are behind major projects in Namibia, Zimbabwe and Mali. This dominance extends beyond mining — China’s refineries account for 60%-90% of global cobalt processing capacity, creating strategic chokepoints in the global value chain.
Mining’s triple challenge
Western mining companies still dominate Africa’s mineral landscape — more than 70% of output and exploration. Canadian, Australian and British firms alone account for three quarters of exploration spend. They now face unprecedented challenges in the form of a triple threat. The stakes could not be higher.
Mining companies that fail to grasp the full complexity of this new era risk being caught in the crossfire. Success will demand elevating geopolitical and country risk management to strategic priority. Companies must fast transform how they gather and analyse intelligence, engage with stakeholders, manage security, and create shared benefits through meaningful local economic development. These traditionally siloed functions need to be redesigned as an integrated system that directly informs strategy and shapes operations.
This isn’t a matter of choice, nor just a matter of survival. It is a condition for future competitive advantage.
• De Baissac is founder and CEO of Eunomix, an advisory firm specialising in geopolitical and country risk management for mining and infrastructure companies operating in complex environments.
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