Overview
Years of political instability and shifting geopolitical alignments in the African continent – especially in the so-called “coup belt” – have created multiple and complex challenges for governments and businesses engaging there. Junta-led and conflict-ridden states, eager to maximize benefits from their natural resources, have turned to resource nationalism, seeking to boost their own share of profits from their plentiful natural resources by expanding barriers for multinationals in the extraction sector to do business there, creating significant difficulties for global high-tech supply chains. Against the backdrop of East-West geostrategic competition on the continent, and a global push to strengthen and insulate high-tech and sustainable supply chains as a national security concern, government instability and mining policies in Africa’s fertile coup belt are increasingly relevant to global business and governments.
Regional Turmoil: Civil Wars, Islamic Terrorism and the “Coup Belt”
In the post-COVID era, economic and social pressures have roiled African nations, stoking the popular discontent and dire material conditions that contribute to contentious elections, conflict, insurgency, and military coups. A significant contributor to rising geopolitical and operational challenges for global business and supply chains in the last several years is Africa’s so-called coup belt, a swath of largely Francophone African countries spanning West Africa, Central Africa, and the Sahel that have all experienced military coups since 2020 (or multiple, in many countries). The coups in Mali, Chad, Guinea, Sudan, Burkina Faso, Niger and Gabon were largely similar in nature, led by powerful and disillusioned militaries or militias dissatisfied with their country’s handling of Islamist insurgencies or anti-government protest movements and capitalizing on government weakness amidst the various economic and social challenges of the post-COVID era. In the wake of these coups, military-led juntas or appointed presidents have struggled to confront the challenges that precipitated their rise in the first place, including deep economic hardship and intractable Islamist insurgencies.
Resource Nationalism on the Rise
“Coup belt” countries have turned to resource nationalism in a bid to pad their own war chests, improve domestic legitimacy by addressing economic hardship or expelling widely unpopular Western partners, and reward or incentivize important non-Western allies like Russia and China. Tanzania kicked off the current wave of African resource nationalism with sweeping mining reforms in 2017. The legislation gave Tanzania broad leeway to renegotiate mining contracts, expand government shareholding rights, and increase foreign royalties paid on minerals and metals. Various coup-belt countries have made similar moves: in Guinea, Doumbouya’s government sharply hiked government taxes on the country’s resources (especially its iron deposits); Niger has revoked the mining licenses of French and Canadian multinationals and suspended the granting of any new mining license; and Burkina Faso has nationalized two major mines and seized gold extracted by a Canadian firm. Mostly, these legal changes are backed by threats of a revocation of mining licenses.
In the most high-profile recent example, the junta-led Malian government retroactively removed tax and customs exemptions for the mining sector and increased the share of a project the state can own from 10% to 30%. A subsequent audit, which the mining industry disputes, claimed the government was missing out on nearly $1 billion of revenues. The military-led government is set to secure almost $700 million in back taxes and other dues from various Western mining multinationals following legal tussles, including the detention of an Australian chief executive and seizure of hundreds of tons of privately mined gold.
Geopolitical Dynamics
Global East-West competition is also at play in the coup belt’s rising resource nationalism. The majority of the coups were influenced by anti-Western (specifically anti-French) sentiment and were followed by downgrading or eliminating Western relationships: in Mali, new interim President Goïta ended Mali’s longstanding military cooperation with France (for which Mali had long been the core and base of operations for its extensive African operations) and doubled down on its relationship with Russian military groups, trading French counterterrorism operations for Russian ones. Niger and Burkina Faso have taken similar steps. In December, a Chinese lithium producer opened a new mine in Mali, and Burkina Faso plays host to a Russian-owned industrial mine. Western investors told The Economist this month that “we see partners being preferred on the basis of nationality.” One notable exception is Gabon: the country is one of the few African states where popular sentiment on China declined in recent years, and the ousted Bongo dynasty’s close relationship with Beijing is seen as one of many factors contributing to its coup.
Geopolitical tension in the mining industry reflects years of great power competition in Africa, where Russia, China, the US and European states have vied for years to establish close relationships with resource-rich states and emerge as partners of choice of economic and strategic engagements. Russia and China have seen more success in the last several years than their Western counterparts: Moscow and its Africa Corps (which absorbed the Wagner Group in 2024) have played an expanding role in African conflicts in recent years, using military support against jihadist insurgencies to expand political influence and secure their own access to natural resources (primarily gold and other valuable minerals, but potentially critical minerals as well).
China, while avoiding military entanglement, is the top economic partner for most coup belt states and is the leading supplier of developmental assistance via its Belt and Road Initiative. China is also the largest player by far in the African mining sector, having invested billions over the last several years as part of its global Belt and Road Initiative (BRI). In 2022 alone, China imported $10 billion in rare-earth minerals from the continent. In addition to dominating the African mining sector, China is the world’s largest refiner of many strategic minerals; Chinese refiners supply 68% of the world’s nickel, 40% of copper, 59% of lithium, and 73% of cobalt. African nations see China as a desirable partner for mining operations not only due to their deep pockets but also for Beijing’s laissez-faire strategy: Chinese investments come with none of the strings, like human rights scrutiny or sustainability, that Western projects can.
The US has a weaker foothold in Africa due to years of perceived neglect and a more hands-on strategy to foreign investment and partnership; President Trump’s eastward focus and move to downgrade foreign aid as a tool of American policy risks deepen this trend.
Impacts on Mining and Global Supply Chains
The coup belt’s rising resource nationalism is a significant risk to the global mining industry, as well as both sustainable and high-tech supply chains. The continent houses significant deposits of critical minerals vital to the manufacturing of modern and next-generation technologies, such as advanced semiconductor chips and batteries for electric vehicles and solar panels. Africa is home to 30% of the world’s critical minerals and higher percentages of some individual minerals – the Democratic Republic of the Congo, for example, accounts for 70% of the world’s known cobalt reserves. Gabon has the second-largest deposit of manganese in the world and is currently the world's third-largest producer. According to research by the Congressional Research Service, the US is 100% import reliant on 14 minerals on the critical minerals list and more than 75% import reliant on 10 others. A lack of access to these metals and minerals risks hobbling Western high-tech supply chains, which are increasingly considered a national security concern by global capitals.
Growing animosity toward Western miners in the coup belt and the resulting unbalanced tax and investment laws have already disrupted production and profits for the mining companies and regional governments. Annual gold production in Mali fell by nearly a quarter in 2024, for example, and the region has seen a surge in arbitrations and legal disputes surrounding mining rights and royalties. Of course, coup belt governments still have powerful incentives to maintain long-term relationships with Western mining multinationals. Fully severing relationships with Western mining and extraction multinationals would be deeply costly for economies with few other exports. Economists see resource nationalism in the coup belt as part of a broader effort to drum up revenues (Mali is reportedly struggling to pay the fees to continue engaging Russia’s Africa Corps), as regional governments have also levied increased taxes on the telecoms sector, online transactions, and small businesses. While it is in the interests of African leaders and the multinational mining industry – as well as the global community writ-large – to stabilize the operational environment for the African extraction sector, the combination of political instability, insurgencies and economic headwinds risks further disruptions with global impact.
