At the opening day of the Africa Down Under (ADU) mining conference, officials, diplomats, and legal experts acknowledged growing tensions between African governments and international investors as resource nationalism resurges—particularly in West Africa. The central theme: a strategic shift toward capturing more value from domestic mineral resources, not just exporting raw materials.

Economic, Not Political, Drivers

Berenice Owen-Jones, Australia’s Senior Trade Commissioner to Ghana, noted that while resource nationalism is not new, its current form is economically—not politically—motivated.

“We’re seeing revised mining codes across West Africa with striking similarities: stronger state control, higher taxes, and expanded local participation,” she said.
“What’s newer is the emphasis on value addition—and in some cases, increased state ownership. Unfortunately, this often leads to disputes or arbitration.”

She highlighted that West Africa has become a global focal point for critical minerals, with Australian companies holding around A$30 billion in investments across nine West African nations. Projects like Rio Tinto’s Simandou iron ore development in Guinea—described as a “nation-building” endeavor—and Atlantic Lithium’s planned lithium mine in Ghana exemplify the region’s strategic importance.

Yet Owen-Jones warned of a delicate balancing act:

“Ensuring governments receive a fair return while providing investors with a stable environment is a persistent dilemma. Trust must be built collectively—by governments, communities, and companies—without undermining industry competitiveness.”

African Union’s Push for Industrialization

Joe Tapera Mhishi, Zimbabwe’s Ambassador to Australia, attributed this shift largely to the African Union’s (AU) policy framework, which explicitly calls for local beneficiation and industrialization.

“Africa’s value-addition agenda extends beyond mining—it’s recognized across sectors,” he said.
“Given the strategic role of critical minerals in global supply chains, Africa is fully capable of forging strategic partnerships with Australia, aligned with mutual interests.”

He pointed to Australia’s recent critical minerals reserve policy as a potential avenue for deeper collaboration.

Legal Risks and Investor Confidence

Kate Apostolova, a partner at Clifford Chance, cautioned that while maximizing citizen benefits from natural resources is legitimate, certain government tactics risk deterring investment.

“Some governments are engaging in subtle, indirect forms of nationalization—like retroactively altering fiscal terms in signed contracts,” she said. “Sudden tax hikes or forced equity increases after project approval create uncertainty.”

She stressed that predictability is paramount:

“Capital flows to stable jurisdictions. If geopolitical and regulatory risks rise, fewer funds will finance mines.”

To mitigate sovereign risk, Apostolova advocated for Bilateral Investment Treaties (BITs), which not only provide legal recourse in disputes but also improve access to financing.

“Projects covered by BITs secure loans on better terms,” she noted. “If dialogue stalls, BITs offer a powerful tool to compel engagement.”

Challenging the ‘High-Risk’ Narrative

Elias Munshya, High Commissioner of Zambia to Australia and New Zealand, pushed back against blanket risk assessments of Africa.

“Of 54 African countries, perhaps four face high risk—but 50 are politically stable, with legal systems comparable to Australia’s. Yet the entire continent is still labeled ‘high-risk’ unfairly,” he argued.

He urged investors to look beyond stereotypes and recognize Africa’s diversity and stability.

Security and Capital Flows

Beyond policy, Owen-Jones also highlighted ongoing security challenges in the Sahel, where instability fuels resource nationalism. Australia’s embassy in Accra now hosts an annual West Africa Mining Security Conference to help companies assess and manage these risks.

In his keynote, Liam Twigger, President of Argonaut Securities, put it bluntly:

“Capital is fluid—it flows where it’s needed and respected, but can vanish instantly.”
“Africa remains an incredibly promising frontier—think Malawi, Lesotho. Capital will follow the path of least resistance and land where it’s welcomed, supported, and protected.”

(Source: Ministry of Natural Resources)