By Arezki Daoud – Foreign mining companies in the #Sahel are experiencing a nightmare scenario. Escalating tensions in the region are being experienced by two major disputes highlighting several intersecting factors that include control of natural resources, economic interests, and political power in the region. French uranium company Orano is locked in a standoff with Niger, while Canadian gold giant Barrick Gold faces an unprecedented conflict with Mali.
In Niger, European firm Orano, which, by the way, is owned by the French government, said this month that the military-led junta in Niamey has taking operational control of its mining subsidiary, Somaïr. The two parties have been engaged in a series of governance disputes, which obviously accelerated ever since the ousting from the country of the French military. Orano said that as of December 4, 2024, Samair’s board was no longer able to make operational decisions, despite its controlling stake, with 64.3% ownership of the company.
The heart of this feud is over the control of the massive Imouraren uranium deposit, which is holding reserves estimated at 200,000 tons. The authorities in Niger have revoked Orano’s license of the Imouraren site, forcing the company to suspend production in October 2024. The company has also complained about the director on its board who represents the government of Niger, saying that he essentially blocked resolutions to prioritize employee wages and safeguard industrial infrastructure, worsening the company’s financial situation.
Meanwhile, in Mali, another company is facing extreme hardship. Tensions between Bamako and Barrick Gold have reached new heights, with the Malian government issuing international arrest warrants for Barrick CEO Mark Bristow and Cheick Abass Coulibaly, a top company executive in Mali, accusing them of “money laundering” and “violating financial regulations.” The dispute, although it is about resource control, is reportedly about a mining contract that Mali alleges Barrick has breached, reflecting Mali’s efforts to break with western influence.
Looking ahead, we expect the two companies to put up a fight, with Orano pledging to defend its interests, most likely through international mediation. Faces significant legal and reputational challenges, Barrick Gold is also expected to challenge Mali’s attacks on its executives.
My personal views: The situation facing foreign investors in the Sahel is not surprising. They are now stuck between a rock and a hard place, being seen as an extension of a former colonial power that has become toxic in the region, yet they are doing what all companies do and that is to produce the best possible profits for their shareholders.
While these companies have the legitimate rights to protect their interests, their executives and employees must be aware that there is a great deal of fatigue among the Sahelian populations on how they have been treated and the disdain, perceived or real, coming from political and military decision-makers in Paris.
Regardless of the juntas being legitimate or not (obviously not), theses regimes appear to have full support of their populations in their efforts to nationalize the mining sector. It is a sentiment that is widespread in the Sahel and that is not likely going to help Orano, Barrick and other companies active there, at least for the time being. In fact, while these countries are struggling with terrorism, poverty, human rights abuses, etc. with the governments seen as complicit in the worsening situation, the path to the nationalization of resources is one of the rare areas where they are getting popular support.
So, should Orano and Barrick cut their losses and leave? Not at all, although Orano’s status as a French government-owned entity does not help.
There are plenty of steps the affected companies can take to seek a negotiated settlement to these feuds. And it is my sense that the people they tasked to perform damage control have no idea what they are doing. It starts with considering the Sahelians not as mere spectators but as people that can and will make decisions for themselves. That reminds me of a recent visit of a US government delegation to a Sahel capital, which ended with the local officials alleging that the members of that delegation threatened them and were inconsiderate to them. This kind of stance is no longer an effective method of managing relations in the region.
But companies that have invested in the Sahel and have assets there, should start by engaging constructively and respectfully in open and transparent communication to address the grievances of the host countries. Using such methods as diplomatic channels and third-party mediation should go a long way to helping ease tensions.
On the ground, it is critical to offer community-focused commitments and support economic development to improve one’s image locally and gain defenders among the general population. Lack of local support, sustained poverty in mining regions, etc, can spell trouble.
Another area to consider is to revisit and improve the revenue sharing models put in place during the previous regimes. Allegations of tax avoidance, tax evasion and money laundering are often used as reasons why there are so many negative reactions from the host country. And so, considering fairer revenue-sharing agreements to align with national interests without sacrificing profitability is a way to neutralize anger.
There are many things that companies embroiled in feuds in the Sahel can do to save the day. But the key words are de-escalation and adaptation to local expectations. Only through a series of such measures that foreign investors can perform effective damage control.
