Growing risk of resource nationalism

Rising global demand for critical minerals is expected to drive a new wave of investment in resource-rich frontier markets in 2026, with Western backers increasingly looking to Sub- Saharan Africa to secure future supply. According to Amelia Haines, a commodities analyst at BMI, the region is expected to be one of the stronger performers this year, with the Democratic Republic of the Congo (DRC) leading the way. “Many of these resource- rich frontier markets are often associated with elevated risk and complex operating conditions for mining projects. “Sub-Saharan Africa, in particular, is poised to be one of the stronger underperforming frontier market regions in the coming years,” she said. “The DRC, reflecting its significant minerals resource base, has copper as a key driver.” She said for decades only major mining companies had braved these countries due to the elevated risk profile, but due to dwindling or non- existent reserves, more companies were actively looking at mining in Sub-Saharan Africa. “As supply constraints intensify and commodity prices climb, we expect frontier markets, now more aware of the value of their resources, to gain greater leverage over the mineral value chain.” But, said Haines, the primary risk for investors remained resource nationalism. “This refers to the ways governments seek to exert greater control over domestic mineral resources to maximise economic or political returns, most commonly seen through export taxes or bans, increased state participation, local content rules and in more extreme cases, nationalism.” While these measures are typically justified on the grounds of promoting local beneficiation and capturing more value domestically, it has materially increased friction between governments and foreign mining companies, so much so that it has deterred or delayed new investment in some regions. According to Haines, the risks were compounded by weak institutional frameworks, regulatory opacity and political instability. “Mining legislation in sub-Saharan African countries is frequently revised, inconsistently enforced and often subject to discretionary interpretation,” she said. “As a result, policy changes can be abrupt and difficult to challenge, increasing exposure to contract negotiations, licence revisions or even outright expropriation risks.” She said throughout 2025 a range of developments had underscored the rising risk of resource nationalism, in particular the growing use of export bans as a policy tool. This was seen in the DRC, where export restrictions were placed on unrefined cobalt in February. While this was later replaced with a restrictive quota, Haines said it was indicative of what to expect from countries. “We expect to see other African markets follow the DRC’s lead to introduce these types of export restrictions in 2026. In fact, we already saw it at the end of last year when Malawi, in October, prohibited the export of all unprocessed minerals. Ghana, earlier this year, introduced an export ban on unrefined gold, mandating that all gold be refined domestically as it looks to increase in-country value addition and capture a greater share of the sector’s downstream margins.” BMI predicts that Guinea will introduce a full-scale ban on bauxite exports this year, while Zimbabwe is expected to do the same with lithium from 2027 and Gabon with manganese from 2029. These markets account for between 10 and 30% of global supply chains of these commodities. “The introduction of these export bans will be significant enough to incentivise local processing but not so severe that substitution becomes imperative for end users,” said Haines. She said the decision by the DRC, which produces more than 70% of the world’s cobalt, to ban cobalt exports is expected to backfire this year, with battery makers around the world accelerating efforts to reduce – and even eliminate – the cobalt content in battery chemistries. She said despite this, efforts to increase refining capacity of cobalt were under way in the DRC while China was building an aluminium refinery, which will process bauxite mined locally. LV