RONAK GOPALDAS AND ROHITESH DHAWAN: Africa needs new ways to navigate geopolitical minefields

Mining has always been at the centre of geopolitical and economic shifts, but recent global turbulence has heightened the stakes. Africa’s resource-rich countries must recalibrate their strategies in response to these changes. A healthy public-private sector relationship has never been more important. Three key trends stand out. 

The securitisation of trade and industrial policy is reshaping global supply chains. What began with trade wars during the first Donald Trump presidency continued through the Biden administration, compounded by pandemic-induced disruptions and Russia’s invasion of Ukraine. These shocks have exposed vulnerabilities in mineral supply chains, forcing governments and corporations to adopt derisking strategies as economic and security priorities become increasingly intertwined. 

The erosion of trust in the global political and financial system has also intensified competition for critical minerals, with countries prioritising resource security to fulfil their defence, energy and technological needs. For instance, the US has attempted to strong-arm Ukraine into mineral deals while taking an aggressive stance towards Canada, Greenland and Panama — territories deemed crucial to its security and supply chains. In an era where economic leverage is as critical as military strength, African states must remain alert to the consequences of this shifting power dynamic.

With the US now adopting an unapologetically transactional foreign policy, companies and governments must rethink how they position themselves in this evolving landscape. Indeed, as the US aims to reshore jobs and energy, it will employ both carrot and stick tactics, “friendshoring” with foreign countries deemed to be strategically relevant to its interests. One clear example of this is Washington’s proposed minerals-for-security deal with Kinshasa, which would enable access in Democratic Republic of Congo (DRC) to materials needed by the US’s tech industry in return for military support against M23 rebels. 

The rise of resource nationalism is reshaping Africa’s mining sector — and not necessarily for the better. As demand for lithium, cobalt and rare earth elements surges, African states are understandably seeking to leverage their resources for greater economic gain. Done sensibly, this could represent a step change in economic growth and social development on the continent. Done poorly, it could spook investment and undermine confidence at the very time it is most needed. 

Botswana’s recently renegotiated deal with De Beers is an example of a positive-sum approach. Newly elected President Duma Boko made it a priority to strike a long-delayed deal that would see the share of diamonds sold by the state-owned company rise relative to those sold by its private sector partner, De Beers, and the establishment of an innovative Diamond for Developments Fund. De Beers got the extension of mining permits it needed at a time of major turbulence in the diamond market, and Botswana got the tools it sought to ensure greater local benefit from mining.

On the other hand, West Africa’s “coup belt” has plenty of examples of what not to do. In recent months, Mali has detained executives of major mining companies and issued arrest warrants for others on the pretext of “unpaid taxes”. In reality, these actions are widely understood to be unlawful and inappropriate shakedowns. Niger took similarly arbitrary and damaging actions, seizing control of French uranium mining operations. These are some of the surest ways to damage international confidence and alienate the private sector, at a time when a joined-up approach is key to navigating changing geopolitics. 

A related issue is what counts as “fair” in mineral investments, which is highly contested. The fifth industrial revolution is firmly digital, powered by AI, automation and clean energy. Africa sits at the heart of this transformation, holding critical minerals needed for semiconductors, electric vehicles and batteries. The question is: will Africa just supply raw materials or will it move up the value chain? 

Having suffered from the resource curse before, many countries are wary of the risk of exploitive practices under the guise of green energy transitions. For some, extracting the ore alone is no longer enough, and downstream processing and value-addition is a must. Simplistically, this means not merely exporting cobalt from the DRC, but also producing batteries and cars in-country.

A counterview is that “fairness” has more to do with how revenues at each stage of production are shared, and not about how much of the value chain is localised. This is grounded in a view that often the structure of commodity markets and the state of infrastructure make value addition in-country impractical. The answers will vary by country and there is no one-size-fits-all approach, but the issue of “fairness” looms large. 

The combination of trade security, resource nationalism and notions of fairness is redrawing the investment landscape in Africa. Where does this leave the resource sector in African economies? And how should they navigate the current turbulence? 

First, a common vision for each country’s development and the role of resources within it has never been more important. If governments plan for job creation and industrialisation through beneficiation that companies aren’t planning for, tension and disagreement down the line could prove costly. Time spent upfront building a shared consensus across society is a worthwhile investment from all parties. 

Second, the geometry of international trade is shifting, with localisation and regionalisation becoming increasingly vital as countries seek resilience against external shocks. To this end, African policymakers and businesses should leverage the African Continental Free Trade Area and double down on integration. Rather than pursuing isolated national strategies, countries should specialise within the value chain and collaborate regionally to build a sustainable ecosystem. This holistic approach would allow countries to more effectively address the long-standing issue of beneficiation.

Given infrastructure and financing constraints, competition without co-ordination would only dilute Africa’s global competitiveness. A collective approach would also enhance Africa’s bargaining power in trade negotiations with major players such as China and the EU, particularly given Trump’s anti-climate stance. 

Finally, a combined commitment from companies to use credible voluntary standards of responsible mining — and from governments to apply a minimum baseline of good practice — is key to build and maintain public support. This is the surest way of guaranteeing that the rush for critical minerals doesn’t trample on the rights of people or the health of our environment. 

Africa’s resources sector stands at a pivotal moment, facing a convergence of geopolitical uncertainty, economic pressure and evolving national priorities. The central question is whether mining companies and governments can navigate the delicate balance between sovereignty and commercial interest in a way that is both principled and pragmatic.

The answer will lie in rebuilding trust — through calm and credible leadership, transparent dialogue and a shared commitment to long-term value creation. With thoughtful economic and commercial diplomacy there is a clear path towards a future that is both prosperous and equitable. 

• Gopaldas is a director at Signal Risk; Dhawan is president and CEO of ICMM.