Foreign military powers in the Sahel region face increased pressure from local factions as they seek to extract minerals, leading to potential conflicts and instability.

Revamped Report:

The dramatic turn of events in Niger's decision to nationalize the local branch of French uranium giant Orano marks just one more instance of a power struggle between West African regimes and foreign mining corporations. Specifically, coup-ridden countries like Mali, Niger, and Burkina Faso – all distancing themselves from their once-cherished French colonial rulers – are now leaning towards strengthening ties with Russia instead.

Tug-of-War in the Region

Niger's nationalization of Orano's Somair subsidiary represents the culmination of a lengthy battle between the country and the French corporation. With Orano already confessing to having lost operational control over Somair months ago, the nationalization serves as a hard-hitting reminder.

Simultaneously, Canadian mining giant Barrick Gold is engaged in a similar standoff with the Malian military over the country's mining code, which came into force in 2023. The military is insistent on receiving hundreds of millions of dollars in back taxes from Barrick, a demand that has resulted in the company losing control of Loulo-Gounkoto, the country's largest gold mine, where Barrick holds the majority stake.

The tension reached new heights in 2024 when Malian soldiers apprehended the director of Australia's Resolute Mining, along with two employees, releasing them only after Resolute agreed to pay $160 million to the junta[1]. Other mining companies, such as Canada's Agnico Eagle, Barrick Gold, and B2Gold, had previously agreed to review their practices and settle disputes over taxes or customs[1].

To add salt to the wound, Burkina Faso seized 200 kilograms of gold produced by Endeavour Mining in 2023 under the guise of "public necessity"[1].

Relinquishing Control

The ruling juntas view this escalating fight against foreign mining companies as a means of reenforcing national sovereignty and regaining control over their natural resources[1]. Although they previously believed their countries' mineral riches were largely sold out to foreign owners and the West, these new leaders promise their citizens a greater stake in the profits generated by their underground wealth.

Niger produces nearly 5% of the world's uranium, while gold accounts for a quarter of Mali's national budget and Burkina Faso’s gold production contributes around 14% of the country's revenues[1].

Jeremie Taieb, Director of consulting firm Tikva Partners, stated, "The population sees this as a push to free states which were previously, according to the new authorities, subservient to Westerners and therefore foreign interests"[1]. This move, in turn, helps to placate public opinion and bolster the narrative that empowers these rulers in power.

Battling Back with International Law

In an attempt to resist this onslaught, the mining industry has turned to international arbitration. For instance, Barrick Gold has sought help from the International Centre for Settlement of Investment Disputes (ICSID)[1]. Alternatively, Orano has filed multiple lawsuits against the Nigerien government, accusing it of orchestrating a "systematic policy of stripping mining assets"[1].

Following Niger's announcement of its intention to nationalize Somair, Orano declared its intention to claim compensation for all damages sustained and to assert its rights over Somair's production shares[1].

Potential Winners and Losers

Despite this legal instability, which Jeremie Taieb believes might drive investors towards more predictable business environments[1], Control Risks’ Beverly Ochieng suggests that foreign firms will likely continue to engage with administrations in the Sahel. This persistence is attributed to the significant and long-term value of mining assets.

However, the countries that are expected to gain the most from this current landscape are Mali, Niger, and Burkina Faso's security partners – notably, Turkey, China, and Russia. Russia, for example, has recently started construction on a gold refinery in Mali's capital, Bamako, and has dispatched mercenaries from its Africa Corps to aid the country in its fight against jihadists[1].

In essence, the foreign mining sector in these West African countries is experiencing tumultuous times. These destabilizing trends mark a shift away from traditional Western partners, fostering new alliances with nations like Russia, thereby redefining political and economic relationships within the Sahel region[1].

[1] Ref: Enrichment Data

The nationalization of Orano's Somair subsidiary in Niger demonstrates the ongoing battle between West African regimes and foreign mining corporations, not only with Orano but also companies like Barrick Gold in Mali.
Beyond the mining sector, this power struggle has extended into the realm of international politics, with countries like Turkey, China, and Russia becoming new partners for West African nations like Mali, Niger, and Burkina Faso.
As public opinion supports the reclamation of national resources, sports and general news have not been immune to the effects of this political shift, with foreign companies, such as Resolute Mining in Burkina Faso, facing disputes and seizures of resources under the guise of "public necessity."

Foreign military powers in the Sahel region face increased pressure from local factions as they seek to extract minerals, leading to potential conflicts and instability.