Heightened state control of natural resources is sweeping across the globe as China limits critical mineral exports and the Trump administration fast-tracks projects.
But nowhere is the concept more gripping and volatile than in the high-potential gold mining jurisdictions of West Africa and Latin America. Miners must re-evaluate risk and reward while they dodge ransom attempts and adjust to the new cost of doing business.
In late April, the military-led government of Burkina Faso announced it would expand its control of foreign-owned industrial mines to maximize revenue from the country's gold reserves, pushing its stake to 30% in some cases while forming a new state mining company. This week, Endeavour Mining (LSE: EDV; TSX: EDV; US-OTC: EDVMF) confirmed the government is raising its stake in the Mana and Hound? mines to 15% from was 10%. The expropriation follows similar moves in neighbouring Mali and Niger to revise mining codes.
"It's about a short-term revenue grab from gold companies," Chris Roberts, president of AfriCan Access Consulting and an expert on geopolitics and the extractive industry, told The Northern Miner in an interview. "(They) don't really care about sending the wrong signals to future investors."
The gold price soared to a record high above $3,500 an oz. in April, driving profits for gold companies and prompting some governments to re-evaluate their stakes with foreign-owned mining companies. The 'Birimian belt', which includes Ghana, Guinea, the Ivory Coast, Burkina Faso and the Mali-Senegal border, has been a global hub for gold mining, but violent extremism, political instability and illegal mining activities have made it a high-risk zone.
Another belt is composed of the countries led by coup-triggered governments stretching from Guinea on the Atlantic to Sudan on the Red Sea. Guinea, which holds the world's largest bauxite reserves, rescinded around 50 mining permits in mid-May, while Barrick (TSX: ABX; NYSE: B) said it's still trying to free seized gold in Mali and settle around $440 million in tax arrears claimed by the military government. Resolute Mining (ASX: RSG; LSE: RSG) paid Mali $160 million last year to free its CEO. He quit soon after.
The juntas of Burkina Faso, Mali and Niger formalized the Alliance of Sahel States last year.
"There is popular support and pressure for African governments to follow the model of Burkina Faso and Mali," Roberts said.
West African Resources (ASX: WAF), Orezone Gold (TSXV: ORE) and Iamgold (TSX: IMG; NYSE: IAG) all have operations in Burkina Faso besides Endeavour Mining. In April, Fortuna Mining (TSX: FVI; NYSE: FSM) opted to sell its interest in the Yaramoko Mine in Burkina Faso, citing the increasingly challenging business climate.
"If any mining company came to me today and said, look, the geology in Burkina Faso or Mali, or Niger is fantastic, we want to overlook the geopolitical risks and the resource nationalism that we see, I would say don't do it," Roberts said. "But if you've already sunk $100 million (or more) and you have an operating mine or expansion that you're planning, as we've seen in some of these countries, then you're stuck in a really tricky situation."
However, Raj Ray, managing director of metals and mining research at BMO Capital Markets in the United Kingdom, said he'd hesitate to brand it as resource nationalism.
"A big part of what we are seeing is global fragmentation; we are moving away from globalization," Ray said in an interview. "Every country around the world is looking at commodities and saying, we need to ensure the security of supply, and you are seeing that play out in Africa pretty significantly."
The BMO analyst said it's taking a different shape in other jurisdictions.
"I wouldn't say every country is looking to nationalize the assets and run it themselves they don't have the resources and the means to be able to do that," Ray said. "They are being careful who they align with and how that profit gets divided."
Mexico, once viewed as a mining-friendly jurisdiction, has become more unpredictable. In 2023, former President Andr?s Manuel L?pez Obrador's regime introduced sweeping changes to the country's mining and water laws, including a ban on open pit mining, reduction of concession terms from 50 to 30 years, and higher environmental, social and profit-sharing requirements.
While L?pez Obrador's successor, Claudia Sheinbaum, hasn't disavowed his anti-mining policies, she has also refrained from enacting his proposed ban on open-pit mining, opting instead for a more measured and consultative approach.
In Peru, the mining sector is also grappling with political insecurity and regulatory shifts. In early May, an illegal mining gang kidnapped and killed 13 security guards at La Poderosa gold mine. Peru, one of Latin America's top gold producers, has seen a rise in anti-mining sentiment and pushback surrounding the government's efforts to regulate small-scale miners.
Ray said in a world where commodity prices are rising and supply is a concern, countries are revisiting mining codes and the way proceeds are divided.
For investors, it's creating uncertainty. Mining safe havens are no longer reliable, and stabilization clauses, explicit commitments made by host states to foreign investors, are being rewritten. However, higher gold prices are generating more profit and giving mining companies more wiggle room to renegotiate.
"When I talk to (mining) companies, they're taking it in stride," Ray said. "There are countries that are being reasonable and negotiating with companies."
In October, Endeavour Mining issued a statement in response to Burkina Faso President Ibrahim Traor?'s plans to nationalize some mining activity.
"Endeavour remains a trusted partner to the Government of Burkina Faso and can confirm that it is not currently aware of any plans to revoke any of its mining permits," the company said.
But Ray says it's hard for the average investor in the West to overlook the redrawing of the mining map.
"If you don't see that political stability, then it becomes difficult for any investor to invest in that country."