Mining arbitrations in Africa

In summary

The mining industry presents inherent risks that make it naturally predisposed to disputes. International arbitration is often the most appropriate means to resolve mining disputes, particularly relating to African mining projects. Most of the recent (known) disputes that have arisen involve commodities constituting a significant portion of African exports, namely iron ore, and critical minerals such as those used in batteries. Further, the push towards achieving net zero emissions by states and global majors, the associated consequences and the transition to green energy have presented challenges, and will continue to do so, in the mining industry across Africa.

Discussion points

• Trends in African mining arbitrations
• Ongoing impacts of the Israeli–Palestine conflict and the Russia–Ukraine war
• ESG, climate change and the energy transition
• Security issues and international humanitarian law
• Impact of Chinese investments
• Resource nationalism
• Managing political risk beyond investment treaties

Referenced in this article

• Nachingwea v Tanzania
• Mauritanian Copper v Mauritania
• Pathfinder Minerals and IM Minerals v Mozambique
• Kansanshi Mining v Zambia
• Winshear Gold v Tanzania

This article aims to provide a concise overview of the characteristics and risks of mining disputes in Africa in the context of the current investment, economic and political climate, in addition to an update on recent Africa-related mining arbitrations.

The year 2024 continued to see disruption to the global markets, especially in the energy and resources sector. The global supply chain was again at risk partly because of the Israeli–Palestinian conflict but also the Russia–Ukraine war. Geopolitical tensions over natural resources, including on the African continent, have been compounded by global demand to secure access to energy transition minerals (eg, cobalt, copper, rare earths, nickel and lithium), and the past year has also seen developments on various mega iron ore projects in parts of Africa, catalysing the next frontier of iron ore development. At the same time, the changes in geopolitics, global uncertainty and oversupply have led to a continued decline in nickel and lithium prices. This has resulted in nickel and lithium projects slowing down. While this climate presents an opportunity for foreign investments and economic growth across many African states, it is likely to increase, at the same time, the potential for disputes, particularly for commodities caught in price fluctuations.

The likelihood of resource-related disputes is also heightened owing to certain factors that – without being Africa-specific – are often prevalent in resource-rich African countries. Mining investments and projects in Africa are sensitive to political risk, which commonly manifests itself in the form of government interference owing to a climate of political instability (at times resulting in military coups), lack of consistent governance, and limited infrastructure and public services. A corollary to Africa’s structural and political challenges is exposure to security threats, ranging from trespassing by artisanal miners to attacks by military or paramilitary groups.

As this chapter goes into publication, the authors also anticipate potential further disruption on the international mining scene owing to the recent shifts in US foreign policy, including tariffs, under the new Trump administration. Whilst it is still too early to address the potential impacts on mining projects, both in Africa and across the globe, it is a development to be watched closely as it unfolds throughout the year 2025.

This article outlines several options available to investors operating in the African mining sector to mitigate the above-mentioned investment risks, including the use of stabilisation and investment protection provisions in long-term host state agreements.

Trends in African mining arbitrations in 2024

The past year saw a significant number of international arbitrations commencing at the International Centre for Settlement of Investment Disputes (ICSID). ICSID recorded 55 new cases in 2024.^[1] At ICSID, the proportion of new cases involving sub-Saharan Africa increased to 16 per cent, while the oil, gas and mining sector remained the largest sector, accounting for 38 per cent of new cases. During 2024, eleven new ICSID cases were launched against sub-Saharan African states,^[2] and one case was commenced against a North African State.^[3] Of these new ICSID cases, only seven concerned a mining project.^[4] They concerned gold, uranium, mineral sands and coal projects.

Interestingly, in 2024, there were no ICSID cases reported as concluded against African states. However, several mining arbitrations proceeded to the hearing phase, and awards may be expected in 2025.^[5]

Impact of Israeli–Palestine conflict on African mining disputes

Shortly after the Israeli-Palestine conflict commenced in early October 2023, a ‘dual shock’ to the global commodity market was anticipated.^[6] As predicted by the World Bank, however, the effects of the Israeli–Palestine conflict on the price of oil up to this point have generally been muted as a result of oversupply well into 2024 (which could persist until at least 2026).^[7] Nevertheless, if the conflict escalates further or spreads to nearby oil states, there could be substantial consequences for the global economy. Some of these would likely include:

• disruption to global supply chain: Israel is an important trade centre in the Middle East, and escalations in the conflict can cause negative impacts on trade networks and the commodity market;
• disruption to global potash supply: Israel is a major global exporter of potash, accounting for 8 per cent of the global potash market. Disruption in this market is enough to impact the global fertilizer market, with knock-on effects on food costs;
• disruption to global oil supply: given the proximity to major sources of global oil supply, the conflict could result in disruption to oil production, and consequential increases in the price of oil – although this scenario is mitigated by the high level of oil supply on the global market; and
• disruption to natural gas supplies: Israel has significant natural gas fields in the Mediterranean, and, if the conflict escalates, it could disrupt gas production and supply.

As part of its assessment of the Israeli–Palestine conflict, the World Bank notes that the behaviour in certain commodities, such as gold, often indicates warning signs on market outlook. The World Bank report explains that gold prices have a unique relationship to geopolitical concerns: they rise in periods of conflict and uncertainty, often signalling a general erosion of investor confidence.^[8] Since the commencement of the conflict, the price of gold has increased from a low US$1,830 at the beginning of October 2023 to US$2,130 in March 2024. Gold prices kept surging throughout 2024, before falling at the end of the year amid early signs of potential de-escalation^[9] and rising again during the first quarter of 2025 as uncertainty regarding the Middle East conflict re-emerged with the change of administration in the US (and announced shifts in US foreign policy).^[10]

As the resolution of the conflict remains uncertain, it is expected that any escalation will result in increased pressure on global trade, including on the cost of energy and the cost of food which, in turn, is likely to exacerbate existing tensions and stability concerns in Africa. Under these exacerbated conditions, the overall risk for mining projects across Africa and potential for disputes will likewise increase.

Impact of Russia–Ukraine war on African mining disputes

In early 2022, the Russia–Ukraine war commenced, and remains unresolved as this chapter goes into publication despite the recent announcements made by leaders globally following the change in US administration. In 2020, Russia was the second largest exporter of mineral products in the world, exporting US$166 billion in value – mainly to China (US$32.3 billion), the Netherlands (US$17.5 billion), Germany (US$9.72 billion), Italy (US$9.6 billion) and South Korea (US$9.22 billion).^[11] The wide-ranging international sanctions against Russia implemented throughout 2022 have triggered severe disruption in the raw commodities markets.^[12]

Further, with supply chain disruption felt during the covid-19 pandemic (and further exacerbated in the wake of the Russia–Ukraine war), governments and the natural resources industry more generally are turning to other supply chain sources to improve security, therefore shifting away from reliance on Russian raw materials.

Since sanctions were launched in 2022, Russian disclosure of imports and exports has been limited. In 2023, sources indicated that Russian reliance on Asian countries rose sharply in both import and export trade, demonstrating the impact of Western sanctions on Russia.^[13]

The Russia–Ukraine war had major consequences on the global economy. Food security has been identified as the major threat to African countries. Prior to the Russia–Ukraine war, Russia was the largest supplier of wheat to Africa, while Ukraine was the third. Wheat prices are said to have increased by 64 per cent in Africa, with surging food prices having triggered protests in Niger and Mozambique.^[14] The toll of the Russia-Ukraine war on African countries remained high 2024.^[15] As such, local unrest in response to food price hikes and increases in the cost of living could see general political risk increase in some countries and disruption to operations – each impacting existing and future mining projects.

In addition to the Russia–Ukraine war’s general impact on inflation, mining projects in Africa are bound to keep seeing operations and transportation input costs dramatically increase as a result of higher energy prices, which are expected to have a long-lasting effect.^[16] This will likely have the most impact on ore transportation. High energy costs, coupled with political instability, will likely disrupt exploration and early-stage projects, impacting their economic feasibility and delaying development.^[17] For some commodities, this will be counterbalanced with high commodity prices as a result of supply constraints. By way of example, the price of iron ore has remained relatively high since the covid-19 pandemic. These developments could well lead to a new wave of disputes between foreign companies and their host governments.

More generally, long-term implications of the Russia–Ukraine war in Africa may include geopolitical realignment, social and economic instability and debt unsustainability as many countries and populations in Africa try to cope with the rising costs of living. There are justifiable concerns that the Russia–Ukraine war, if it continues unresolved, will create further instability across the continent. For example, it has been reported that Russia is utilising political instability in Sahel and ‘exchanging muscle for minerals’.^[18] Similarly, the Russian group Wagner, despite the demise of its leader in 2023, was reported to maintain a presence in Mali in exchange for access to minerals. One security risk analyst commented that traditional Western stakeholders may ‘start being muscled out of an extractive sector that Russian companies are able to dominate’.^[19]

ESG, climate change and the energy transition

As discussed in a previous edition of this article, developments on the phasing out of fossil fuels were expected in recent years. The agreement reached at the United Nations Climate Change Conference 2023 (COP2 8) (held in Dubai in December 2023) to phase out fossil fuels in a ‘just, orderly, and equitable manner’ (dubbed the 'UAE Consensus'),^[20] would seem to be in tension with mining operations in developing markets, particularly the extraction and beneficiation of technology metals required for renewal energy.

This tension arises owing to multiple reasons, including (1) the relative lower cost of fossil fuel energy sources compared to other energy sources and (2) the opportunity for developing countries to benefit economically from the extraction of fossil fuels. The technological revolution required to address climate change presents significant opportunities, particularly for states endowed with the natural resources used in the production of these technologies, including cobalt, copper, rare earths, graphite, nickel bauxite and lithium.

Various African states have significant potential in relation to some of these minerals: the Democratic Republic of the Congo (DRC) is home to the largest reserves of cobalt, Guinea has the world’s largest reserves of high-grade bauxite, and Zimbabwe, Namibia, Ghana, the DRC and Mali have some of the largest reserves of lithium. Significant copper reserves are located in the DRC, Zambia, South Africa and Namibia, and rare earth deposits have considerable potential in Madagascar, Malawi, Kenya, Namibia, Mozambique, Tanzania, Zambia and Burundi.

However, the race for these resources must be tempered by growing consideration of the social and human rights impact of undertaking new mining operations and closing existing fossil fuel operations, including for the purpose of advancing the green transition. This explains the holistic approach to environmental, social and governance (ESG) issues.

An ever-increasing proportion of companies, not just those operating in Africa, are required to demonstrate that they comply with high standards of ESG. This broad and encompassing term has risen fast to the top of boardroom agendas, requiring policies and frameworks to address all aspects of ESG in companies’ operations, including climate change, sustainability and human rights-related risks.

This is particularly the case in the context of mining investments in Africa, in part because of the specific risks and characteristics outlined in this article. Stakeholders increasingly demand effective actions and heightened levels of transparency in relation to ESG, and mining investors seeking finance are increasingly required to demonstrate their ESG credentials. The mining industry is one of the most exposed to ESG risks, with shareholder activism and participation by non-governmental organisations placing the sector under the spotlight.

Particular emphasis is being placed on mining operations in Africa because of a poor historical track record by some foreign companies. For many African states, the harmful actions of some foreign investors in the past justify a focus on compliance with local laws and, increasingly, ESG issues, including international environmental and human rights standards. A failure to comply with these laws and standards may result in claims for damage to reputation, or flowing from the termination of contracts or exploitation of rights by states, as well as in counterclaims being made by states against investors.

Mining investors must be ready to demonstrate their efforts in compliance with local laws and regulations, socio-environmental standards and business human rights principles. This is particularly true in the context of investor-state disputes concerning natural resources projects located in emerging economies, where respondent states and sometimes third parties, through amicus curiae submissions, will increasingly question a claimant's compliance with their legal obligations on an ESG front. Disputes arising from contractual ESG standards are also expected to increase, as companies are required to insert ever more demanding ESG clauses in commercial contracts, the breach of which could lead to claims for damage to reputation or the termination of contracts.

Similarly, many new generation BITs and free trade agreements contain express provisions reserving states’ rights to regulate to protect public welfare objectives, such as public health, safety and the environment – much akin to similar carve-outs in the context of World Trade Organization agreements.

It is, therefore, likely that ESG-related issues will be an increasingly prominent feature in mining arbitrations in Africa, driven by increasing references to the protection of environmental, social and public health objectives in both contractual arrangements and investment treaties. Foreign investors may be obliged to comply with local laws as a condition of their concession, as a term in a host state agreement (where there is one) or even as a gateway requirement to qualify as a covered investment under some investment treaties. Breaches of these obligations may result in claims against the investor or counterclaims by the state. In the context of investment treaty arbitration, the plea of illegality, namely that the investor has failed to comply with local laws, is often argued by states ‘as a question of admissibility or a question on the merits of the case’.^[21]

Security issues and IHL and the impact on mining disputes

Security issues and international humanitarian law (IHL) are other issues relevant to the African mining industry. There were at least two coups in Africa in 2023,^[22] and two other coup attempts across Africa.^[23] In 2022, there were again at least two coups in Africa,^[24] along with other coup attempts. This is consistent with coups in previous years,^[25] and they took place across what some refer to as the ‘coup belt’ spanning West and Central Africa.^[26]

The year 2024 was not any quieter on the political front, with no less than 13 presidential or general elections having occurred across African states in 2024.^[27] These elections and their results proved to be sources of unrest.

One of the elections in 2024 was the presidential election in Senegal initially to take place in February 2024. The Senegalese president postponed the election by 10 months, to 15 December 2024, through a contentious bill extending his tenure.^[28] This move was met with violent protests and strikes in the weeks that followed, with analysts expressing concern for stability in Senegal. On 7 March 2024, President Macky Sall dissolved the government, named a new prime minister and ultimately fixed the presidential election for 24 March 2024. The opposition won.^[29] This sequence alone highlights the heightened political instability affecting countries in the region which were traditionally regarded as (relatively) stable.

Of particular note, 2024 also saw governments in the region take physical action against foreign investors. In the last quarter of the year, the military junta ruling Mali detained the employees and officers of two foreign mining companies until payment of sums allegedly owed by way of additional taxes.^[30]

Compounding the political instability, the emergence of the Russian–Ukraine war in 2022, followed by the Israeli–Palestine conflict in 2023, both of which persist to this day, has hindered economic recovery from the pandemic, particularly in Africa. These two geopolitical events have had significant consequences in Africa, including regarding food security and energy prices. As a consequence, some African states have already seen unrest, including Niger and Mozambique.^[31] Further unrest is expected over the coming year in other African states, which may disrupt operations of producing mines and may increase political risk for projects seeking development finance.

From an arbitration perspective, in countries where there is armed conflict, host states generally have a duty to protect the physical integrity and private property of their residents and investors, although this may be difficult to achieve in remote or dangerous areas. Mining companies may rely on relevant provisions of their mining concessions or conventions to secure the unimpeded enjoyment of their mining rights.

Foreign investors may also rely on the fair and equitable treatment and full protection and security standards, which are present in most international investment agreements currently in force. Full protection and security has been interpreted to mean that the state is obliged to take ‘active measures to protect the investment from adverse effects’ that ‘may stem from private parties’, including demonstrators and armed forces.^[32] States have been held liable for failing to protect investors and their investments against private violence, such as through the failure of police to protect an investor’s property from occupation and to respond adequately to violent incidents. A series of arbitral awards illustrates the application of full protection and security of investments in Africa.^[33]

Another recurring security issue for large-scale mining companies concerns increasing encounters with unauthorised artisanal and small-scale miners in areas where they hold exclusive mining or access rights. While artisanal mining can help create employment in underdeveloped areas and finance development infrastructure in local communities, it is often associated with poor health and safety conditions and may entail negative environmental and social consequences; therefore, artisanal mining may create direct safety risks for local populations and large-scale mining companies, which run the risk of being blamed for the damage done by these unlicensed operators.

The presence of unauthorised (and often inadequately equipped) artisanal miners on a large-scale mining site creates a substantial risk of injury for trespassers and for legitimate site users. Moreover, the activity of artisanal miners may interfere with ongoing exploration and production works, in part by creating hazardous excavations or using inefficient processes that prevent the future recovery of valuable minerals left behind. In addition, artisanal miners often use toxic substances and processes to extract and treat minerals without taking adequate protection measures. The resulting environmental contamination may endanger local populations, impair large-scale mining operations and result in substantial liability for the mining company holding mineral rights over the area.

Finally, artisanal mining activity results in the production of non-renewable mineral resources by a third party who is not the rightful permit holder, therefore depriving the permit holder of its economic rights over these resources. This competition over the same resources – and the large-scale miners’ efforts to keep artisanal miners from trespassing – may result in conflicts between the large-scale operators and artisanal miners (who may be armed or supported by armed groups). This risk is particularly high in areas where government presence and economic opportunities are limited.

Continuous impact of Chinese investments

In the background of these recent developments, the presence Chinese operators and Chinese finance in Africa remains another source of influence on African mining projects and the disputes arising therefrom. This trend remains strong, as evidenced by President Xi Jinping's pledge at the end of 2024 to increase China's financial assistance across Africa by US$50 billion within the next three years.^[34]

For some time now, China has been Africa’s largest trading partner, with Chinese foreign direct investment to Africa increasing markedly from around US$75 million in 2003 to US$4.2 billion in 2020.^[35] According to the Center for Global Development, China’s development banks (Exim Bank of China and China Development Bank) provided US$23 billion in financing for infrastructure projects in sub-Saharan Africa between 2007 and 2020, which is double the amount lent by banks in the US, Germany, Japan and France combined.^[36] Interestingly, for the first time, China’s investment in renewables infrastructure (including thermal solar, hydro, wind, biomass, geothermal and energy storage) exceeded its investment in fossil fuel infrastructure.^[37]

Reports indicate that, in recent years, project lending from Chinese policy banks, such as Export-Import Bank of China and China Development Bank, has tailed off, with increased lending from commercial Chinese banks.^[38] The overall trend of reduced financing from China will likely negatively affect African trading partners over the medium term.^[39]

In addition to the above lending trends, alternative forms of Chinese influence observed across Africa continue. For example, in October 2023, China gifted Zimbabwe a new US$200 million parliamentary building financed and constructed by the Chinese government.^[40] This is reported as a wider trend of gifting across Africa, including parliamentary buildings in Mozambique, Lesotho and Guinea-Bissau.^[41] Accordingly, a high degree of Chinese influence is expected to continue in Africa.

Chinese investment in cobalt in the DRC is a good example of Chinese power and influence in Africa and on the critical mineral supply chain. In 2023, China’s CMOC Group overtook Glencore to become the world’s largest producer of cobalt, increasing production by 174 per cent year-on-year to 55,526 tonnes, representing one quarter of global demand.^[42] In 2023, there was an estimated 12,500 tonnes of surplus cobalt produced, with prices falling from US$40 per pound in May 2022 to US$13; however, CMOC plans to lift cobalt output further, irrespective of current supply demands and cobalt prices, putting other cobalt projects at risk of becoming uneconomic. Intense production expansion is expected to continue from Chinese-owned mining projects in Africa.

For low- and middle-income African countries, repayment of the vast loans provided by China is becoming a significant problem. Chinese debt repayment issues have arisen in Ethiopia, Kenya, Uganda and Zambia.^[43] In these circumstances, governments may be forced to turn to alternative ways to repay their debts, such as through granting rights and concessions over valuable resource assets, possibly including those committed to foreign investors.

The inability to repay debt will likely reinforce China’s economic influence and control over vast reserves of key mineral resources on the African continent. This may include securing access to minerals and metals necessary for the transition to renewable energy, including cobalt, copper, rare earths, graphite, nickel, bauxite and lithium. The desire to shore up supply of these critical resources will undoubtedly lead to significant investment competition in states endowed with them, which in turn will likely drive disputes both among private investors and between investors and the host state (especially in circumstances where the host state would grant foreign-owned mining projects on their territory to China-affiliated entities by way of debt repayment in kind).

One notable characteristic of Sino-African mining contracts over the past decade is the inclusion of commitments to develop or contribute to infrastructure development, as some agreements between African states and China or Chinese state-owned companies contemplate the provision of infrastructure as a means of payment for the resource. These arrangements increase the potential for disputes between foreign investors and host states that can arise not only from the development and operation of mining projects but also from the construction and operation of large-scale infrastructure projects. The interconnection between access to mineral resources and infrastructure investments could also result in host governments deciding to terminate mining rights as a result of an investor’s failure to deliver on its infrastructure commitments.

Resource nationalism

Political risk remains another frequent and significant challenge faced by investors in the mining industry. As is evident from the most recent trends and developments reported above, this is particularly the case in African countries where political instability, the lack of strong governance and political structures, as well as more limited administration and public services, may adversely impact the development and operation of mining projects. Analysing the period from Q4 2022 to Q4 2023, Verisk Maplecroft identified significant deterioration in their resource nationalism index score for Cameroon, Burkina Faso, Central Africa, Chad, Congo, Ghana, and Sudan.^[44]

Political risk most often manifests itself in executive and legislative measures aimed at increasing government control over the development of natural resources in a manner that disregards the rights of existing concession holders – a policy phenomenon often described as ‘resource nationalism’. This is not to be confused with the legitimate aims of states seeking to achieve the highest return from their natural resources so that the people for which governments are responsible can enjoy the greatest benefit from their nation’s natural endowment. Rather, disputes arise when measures taken against investors are unlawful in that they are discriminatory, not in the public interest, not carried out under the due process of law or not accompanied by fair compensation (ie, the conditions of lawful expropriation under public international law).

Resource nationalism in sub-Saharan Africa is arguably closely connected to its history of colonisation and decolonisation. While Western powers wished to retain control of natural resources post-decolonisation, buoyed by their access to specialised workforces and their ownership of hydrocarbons and mining projects, the newly independent former colonies wished to regain control of their own resources.

In 1962, the United Nations General Assembly adopted Resolution 1803 (XVII) on Permanent Sovereignty over Natural Resources (Resolution 1803). Resolution 1803 consecrates many of the host government’s rights (including nationalisation rights and rights regarding the expropriation of natural resources on its territory) while also providing guarantees and compensation for foreign investors owning natural resource projects that are affected by state measures. In this sense, some commentators consider Resolution 1803 to be a key predecessor to the system of investment protection based on international investment agreements in force today.

A resurgence of resource nationalism may be driven by increases in commodity prices, fuelled by a combination of continued increase in demand for raw materials and further disruption in global raw mineral supply over the past few years, particularly in respect of gold and iron ore. The increasing demand for green minerals is also bound to drive up the prices for these commodities, prompting states to take measures designed to enhance the state’s share. One significant method by which this can be achieved is the enactment of fiscal legislation increasing the amounts payable to the state (in the form of taxes and royalties). Mining laws enacted over the past few years by Mozambique, Zambia and Ghana all contain a series of measures in furtherance of that objective.

In this climate of increasing resource nationalism, the financial pressure is being felt by (or transferred to) investors, as an increasing number of new state measures affect the profitability and operability of mining projects. From an investor perspective, unforeseen restrictive measures imposed by governments may result in a desire to suspend projects, restrict production or find some other way to protect their investments. Further, given mining companies’ general reliance on debt financing, investors may increasingly be forced to take whatever measures they can to meet their repayment obligations.

In this context, impacted investors are likely to challenge state measures that they view as confiscatory, punitive, or arbitrarily or discriminatorily imposed. Challenges may be based on contracts or national legislation providing for arbitration as the dispute mechanism or on investor-state dispute settlement provisions in international investment agreements, including BITs, linking African host states with partner states around the globe. There are now many examples of African states having taken these measures over the past few years, including the DRC, the ROC, Cameroon, Sierra Leone, Mali, Madagascar and the Ivory Coast.

Many of these measures are also aimed at increasing the amount of taxes and royalties accruing to the state from mining projects, and these fiscal measures have evidently been the source of disputes.

Host governments may also impose other measures on mining projects, such as levies in the export of raw ore or mandating in-country beneficiation. This trend of requiring in-country processing, such as beneficiation, is expected to become more common, particularly with new lithium extraction sectors.^[45]

Managing political risk beyond investment treaties

Stabilisation of the applicable legal and regulatory framework is can be essential for large-scale mining projects, given the often-lengthy time frames involved from resource definition to exploitation. In this respect, mining companies are drawing on the experience of the international oil and gas industry, where businesses have long sought to manage the risks of adverse legislative change by including stabilisation clauses and choosing international law in their long-term agreements with host governments. In the African mining industry, they usually take the form of mining licences and conventions required by law; however, these agreements may also be concluded on an ad hoc – and even sui generis – basis, in which case they are often referred to (officially or unofficially) as host government or state agreements, or development agreements.

Besides the stabilisation of laws, investors can seek to build into their mining conventions or other agreements the substantive (and substantial) protections typically found in investment treaties, including protection against expropriation, fair and equitable treatment, full protection and security, and most-favoured nation treatment. These fundamental protections, coupled with an effective international arbitration clause, can help protect a mining project from adverse and unlawful measures.

During the negotiation of a host government or state or development agreement, securing the most favourable fiscal terms may need to be balanced against securing sufficient investment protection and international arbitration. This trade-off is even more relevant in countries that do not have a wide-ranging BIT programme. Acquiring these investment protections and the right to resolve disputes in international arbitration can be the difference between having an effective means of recourse, or not, when things go wrong. For countries with applicable BIT protection, companies may – and, in many situations, should strive to – couple a host state agreement with any BIT available to provide a multilayered investment protection structure. This is because, no matter how flexible and protective, host-government or state and development agreements remain contracts that are almost invariably subject to the vagaries of domestic law, which the host-state might amend, including in such a way as to render the agreement worthless.

As discussed above, political instability remains a harsh and current reality on the African continent. Companies with mining projects looking at the next stage of development should consider negotiating a host state or development agreement with their host government that is balanced and fair. Obtaining investment protection that is balanced, fair and transparent can significantly improve an investor's chances of withstanding political swings or geopolitical evolutions.

Endnotes