In 2022, a panel from the World Commerce Organisation (WTO) sided in opposition to Indonesia in a case introduced in opposition to it by the EU. Indonesia had, over the earlier years, enacted a collection of insurance policies geared toward growing native processing of nickel, a important mineral for the inexperienced transition, of which Indonesia accounts for round half the worldwide provide.
The EU claimed these insurance policies violated free commerce guidelines, whereas Indonesia argued they aligned with its financial improvement objectives and had been crucial to take care of the sustainability of the business.
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On one hand, the EU’s victory signifies that the move of nickel, which is important to electrical automobiles (EVs) and different future applied sciences, will proceed extra freely than it might have in any other case. Alternatively, it reinforces a historic commerce imbalance between growing resource-rich nations and international actors, the place the host nations of those sources are sometimes restricted to exporting uncooked supplies and lose out on the added worth of producing processed items.
This case is only one of many examples of the rise of useful resource nationalism – the place nations try to say authority over their pure sources – that has taken maintain over the previous decade. It additionally displays the a number of forces driving this development, and the way they’re usually at odds with one another. Key components embody a need to redefine the place mineral-host nations sit on the availability chain; the massive uptick in demand for minerals that underpin digital infrastructure; and an more and more protectionist world the place the logic of free commerce and globalisation has been upended.
In March 2025, threat evaluation firm Verisk Maplecroft recorded an increase in its useful resource nationalism index, which measures authorities management over exercise within the mining and vitality sectors. It highlights that 47 growing nations, 17 of which produce important minerals, have seen a big enhance in authorities involvement because the first quarter of 2020.
“International locations are saying, it isn’t adequate to return and extract a useful resource from right here, however you additionally have to spend money on the processing and transformation into a better value-added good in our personal jurisdiction,” Jimena Blanco, senior director and chief analyst at Verisk Maplecroft and one of many authors of the research, tells Funding Monitor. Conventional strategies of useful resource nationalism, similar to tax hikes and expropriations, at the moment are being outdated by extra refined coverage adjustments.
Energy imbalances and the useful resource curse
Rising the state’s stake in mining operations has been one of many instruments governments have used to achieve extra management over their nations’ pure sources. UNCTAD’s World Funding Report 2025 notes this shift in extractive industries, outlining that “measures much less beneficial to buyers primarily consisted of international fairness restrictions and tightened allow necessities”.
This shift has been significantly noticeable within the African mining sector, the place Arthur Michelino, head of worldwide coordination at OLEA Insurance coverage Options Africa, argues that mining codes are being rewritten to “embed sovereignty into long-term contracts”. Whereas a number of the interactions between host nations and international multinationals on this pursuit have been excessive – Mali’s navy junta arrived in certainly one of Barrick Gold’s mines by helicopter in July and seized $117m (C$163.3m) price of gold – there are clear historic grievances which have led to this shift.
“Mining codes had been designed in favour of international corporations to keep away from tax and to permit them to function inside a really restricted regulatory setting of their favour,” Michelino tells this publication. “In Mali, Niger and Burkina Faso, with their new mining codes, we’re witnessing this state-led initiative to take management over the sources by regulation.”
Michelino is referring to a collection of legislative adjustments which have elevated the state’s stake of their nations’ mining initiatives. In 2023, Mali modified its laws to grant the state a ten% fairness stake in mining initiatives, the choice to buy as much as 20% in a while and a proper to allocate 5% to home buyers. Related reforms have taken maintain throughout the continent. In 2017, Tanzania raised the required authorities stakes to as much as 50%.
“It has clearly arisen out of this historic sample of extraction from Africa, the place many of the commodities are leaving in an unprocessed type,” visiting fellow on the European Council on International Relations and director of Msasa Consulting, Sarah Logan, tells Funding Monitor. She notes that by exporting solely uncooked supplies, nations are dropping out on the added worth that minerals achieve after they have been processed into extra superior kinds.
In 2024, Zimbabwe’s Authorities banned unprocessed uncooked lithium exports after it mentioned the nation was dropping out on €1.7bn of income from exporting the unprocessed model, reasonably than the batteries it’s used to fabricate. This lack of income is a well known actuality and frustration amongst the continent’s leaders, who spotlight comparable dynamics in different main commodity export markets similar to agriculture.
This sample of extraction has meant that the international funding that has flowed into the mining sector within the continent has not been economically transformative for a lot of host nations. Some observers attribute this to the ‘useful resource curse’ concept, the paradox the place resource-rich, less-developed nations expertise low financial development. For instance, Mali is likely one of the high gold producers globally however continues to be one of many poorest nations on the earth.
The impetus to extend the native worth addition within the African mining sector is a part of an effort to handle low development and excessive unemployment, Logan notes.
“A part of it’s earnings, a part of it’s the actual determined want of governments to create extra jobs. Industrialisation hasn’t actually taken off, and perhaps minerals could possibly be a foundation for extra financial exercise, which may develop into extra subtle industrialisation,” she outlines.
The rise of important minerals
The rise of useful resource nationalism can be being fuelled by surging demand for the important minerals that can underpin the inexperienced transition, similar to lithium and nickel. In keeping with GlobalData’s commodity manufacturing forecasts, lithium manufacturing is anticipated to develop at a compound annual development charge of just about 14% between 2024 and 2030. Nevertheless, this large uptick in demand can put long-term objectives at odds with one another.
The target of making extra sustainable and fewer environmentally damaging merchandise similar to EVs could be undermined by unsustainable practices utilized in mining processes. In Indonesia, the non-profit Auriga discovered that the place builders have constructed nickel processing amenities, surrounding forests disappear twice as quick.
GlobalData highlights that copper mining, for instance, is experiencing lengthy lead instances for brand new initiatives because the business “makes an attempt to scale back its personal environmental footprint and deal with ESG [environmental, social and governance] issues inside copper mine host nations”.
In Chile, which GlobalData forecasts will maintain 42% of the worldwide market share for copper refining by 2030, many initiatives have been halted or contracted because the present authorities got here into energy.
“That is the place it will get tough. In a few of these, it is extremely exhausting for corporations to show that the laws of the foundations was interpreted in such a method that it was to restrict their operations reasonably than to guard the setting. That’s the very gray line that they should tread on,” Blanco explains.
Native worth addition as an answer?
The purported aim of governments enacting these kinds of insurance policies is to extend the advantages that pure sources carry to their nation, whether or not it’s by growing financial advantages or by limiting the environmental penalties of mining practices. To handle the previous, one long-suggested technique has been to extend native worth addition by the native processing of uncooked supplies.
Nevertheless, there are sensible difficulties with this strategy.
“Traders are solely going to spend money on processing operations someplace it will likely be aggressive,” Logan says, referring to the African mining sector. “It’s already extraordinarily exhausting to compete in opposition to China as a result of they produce at a a lot larger scale and so they have cheaper inputs.”
One of many important obstacles to preserving processing in-country is round prices. Mineral-rich nations might lack the required infrastructure similar to transport techniques, dependable vitality grids and reasonably priced inputs, so “there actually must be reforms to assist carry down the price of working in these nations”, Logan highlights. That’s the reason ventures just like the Lobito Hall, a railway infrastructure venture that might join Angola’s Atlantic Coast to mining areas within the Democratic Republic of Congo (DRC) and Zambia, are so extensively mentioned.
If insurance policies that prohibit international involvement are enacted too forcefully or and not using a plan, they’ll additionally backfire by portraying an unstable enterprise setting for buyers. International locations could be taken to the WTO courtroom, like Indonesia, or corporations might depart a rustic altogether (Glencore is at present attempting to depart the DRC). Naturally, how a lot corporations are keen to barter relies upon totally on how vital a sure location is to that mineral’s international provide chain.
“In some locations in West Africa, mining corporations have been fairly keen to barter, simply because these nations are main suppliers, however a variety of African nations aren’t truly that vital in international provide chains, as a lot as it can be crucial for his or her economies,” Logan notes.
Zambia has copper reserves and Namibia has lithium, for instance, however they aren’t main international suppliers. This makes protectionist insurance policies dangerous, as a result of if governments “overplay their hand” they might lose funding altogether, notes Logan.
Native content material legal guidelines
Within the African mining sector, Logan highlights that buyers ought to control the event of native content material legal guidelines, which require companies to make use of a share of regionally sourced items, companies or labour. Tanzania is at present amending its mining code to foster extra home enterprise participation.
Nevertheless, as with the makes an attempt to extend native mineral processing, these adjustments ought to be facilitated for buyers to take care of a steady enterprise setting. Rwanda, for instance, has a neighborhood provider database of companies which have already been vetted by the federal government.
For Blanco, the rise of recycling laws in Europe will develop into an more and more vital side of the marketplace for sure minerals. In 2024, the EU handed the Vital Uncooked Supplies Act, which goals to safe the availability chain of important uncooked supplies for member states by a concentrate on increasing extraction and the recycling of uncooked supplies.
“It’s changing into vital from the attitude of preserving sure minerals inside the economic system, reasonably than how recycling has taken place traditionally, which has been by exporting it elsewhere,“ Blanco notes.
As governments pursue this array of objectives – environmental laws, securing important mineral provide chains and financial improvement – insurance policies will proceed to each mix and at instances contradict one another. Nevertheless, international buyers should take care of the fact that host nations will wish to negotiate on totally different phrases than they’ve up to now – a improvement they really feel is lengthy overdue.
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