· 12 min read
Executive Summary
The surge in global demand for critical minerals is both an opportunity and a challenge for African countries rich in these resources. Despite controlling substantial reserves of cobalt, lithium, copper, and other critical minerals, many African governments continue to sign mining deals that inadequately benefit their economies or protect mining-affected communities. A major cause of this is the asymmetry in negotiation capacity between governments and multinational mining companies. This policy brief proposes that mineral-rich African countries strategically invest in negotiation capacity building, rooted in updated data, technical partnerships, and regional collaboration, to reverse this pattern for a sustainable and inclusive extractive future. Drawing from the success of Botswana and policy initiatives like the Africa Mining Development Centre (AMDC) and the African Legal Support Facility (ALSF), it outlines a roadmap for governments to assert greater control and community accountability in mining deals. The brief identifies areas to be acted on for the development of skilled professional state negotiators and to empower local communities.
The negotiation skills gap in Africa’s extractive sector – causes and effects
Africa accounts for approximately 30% of the world’s known reserves of critical minerals, including cobalt, lithium, graphite, and copper.
Along with this, the demand for some critical minerals is projected to more than triple by 2050, as per the IEA projections. Investment in mining continues to grow 10% YoY in 2023.
This presents a strategic opportunity for African countries to use their mineral wealth for economic development and prosperity. However, despite this natural advantage, many African states continue to experience the familiar paradox of abundant resources, i.e., the persistence of poverty, environmental degradation, and governance challenges.
CAUSES: A critical but often overlooked cause of this paradox lies in negotiation asymmetries between African governments and multinational mining companies. In several mining deals, African governments enter negotiations lacking technical, legal, and financial expertise to secure equitable terms that could ensure fair revenue and environmental protection. Multinational companies, by contrast, are often represented by elite law firms, financial advisors, and geological experts, enabling them to craft contracts that maximize their interests, often at the expense of host countries’ fiscal returns, environmental safeguards, and community benefits. By the time these companies say they are ready to negotiate, they will have spent around 3-5 years investigating the potential of the resources, the cost of harvesting them, financing models, corporate social responsibility plans, and the market value covering various price fluctuation scenarios. Most African governments, on the other hand, often have little knowledge of these same issues. The states in effect will be playing catch-up, often with a severe human resource deficit.
EFFECTS/CONSEQUENCES: This negotiation gap leads to several consequences, among which are the:
• Underpricing of mineral assets, leading to significant revenue losses
• Perpetuation of Extractivism, where governments would have to give out more poorly negotiated mining licenses to realize any substantial revenue for the state
• Overly generous tax holidays and exemptions, undermining public budgets
• Leniency in environmental and social clauses, resulting in community displacement and ecological damage
• Lack of transparency and oversight, leading to corruption and erosion of public trust. The consequences are not only economic. Poorly negotiated mining agreements usually fail to incorporate local content requirements, infrastructure investments, or community development projects, reinforcing a vicious cycle of underdevelopment and inequality in mining communities.
With the highlighted causes and effects, this policy brief argues that the professionalization of negotiation skills within African governments is a technical and strategic necessity to ensure they are always ready and prepared to enter negotiations as knowledgeable resource owners and not beggars to investors. Building a stream of skilled, well-supported negotiators equipped with up to-date geological data, access to independent expertise, and backed by regional frameworks such as the Africa Mining Vision (AMV), is critical for African states to reclaim control over their mineral wealth, ensure fairer revenue-sharing arrangements, and safeguard the rights and futures of mining communities.
Significance of the issue – a continental menace
The absence of robust mining negotiation skills among African governments has led to significant losses in potential revenues and compromised national interests in the mining sector. Several countries, including Guinea, the Democratic Republic of Congo (DRC), Liberia, etc., have entered mining agreements criticized for undervaluing their mineral resources. These instances underscore the critical importance of building negotiation skills within African governments to ensure that mining agreements are equitable, transparent, and beneficial to national interests.
Guinea’s Bauxite: “The deal of the century"
Global Witness first sounded the alarm about Simandou mine arrangements in late 2012. In what “The Times” newspaper called “The deal of the century”, BSGR, an Israeli mining company, had in 2008 secured rights to two of the giant ore deposit’s four exploration blocks after they were taken away from a rival miner, Rio Tinto. BSGR paid nothing (it says it invested $160 million in Simandou and other Guinean projects) and then resold half of its stake to another mining company, Vale for $2.5 billion. That was equivalent to twice Guinea’s national budget that year. The lack of skilled negotiators made corruption attractive and led to the gross undervaluation of those rich exploration blocks.
Democratic Republic of Congo (DRC): A Pattern of undervalued deals
The DRC has experienced multiple instances where mining contracts were signed at terms unfavorable to the country. The Democratic Republic of Congo (DRC) faces losses of at least $3.71 billion from shady mining and oil deals, according to new calculations by the civil society coalition group called Congo is Not for Sale. The DRC has lost $1.95 billion so far. The DRC stands to lose $1.76 billion more in future royalty payments if it does not take immediate action to review the deals. Notable among these poorly negotiated deals is the Mutanda Mine Sale. In 2011, Gécamines sold its 20% stake in the Mutanda copper and cobalt mine to a company associated with Dan Gertler for $120–137 million, despite estimates valuing the stake between $600–849 million.
Liberia: The western cluster iron ore deal
In 2010, Liberia granted a concession for the Western Cluster iron ore deposits to Elenilto Minerals & Mining LLC, a company with no prior mining experience. Elenilto quickly sold a majority stake to Sesa Goa Limited for $90 million and the remaining shares for $33.5 million, profiting without any mining operations. This deal was criticized for the government's failure to conduct due diligence and for undervaluing national resources.
The strategic role of negotiation skills: Why negotiation skills matter
Effective negotiation is not merely a technical exercise, it is a political and economic tool of statecraft.
Skilled negotiators can:
• Assess mineral valuations and fiscal terms with technical accuracy
• Leverage international frameworks to demand better community outcomes
• Embed enforceable clauses related to local content, environmental standards, and contract renegotiation
• Resist pressure for rushed deals during commodity booms or geopolitical competition.
Case study: Botswana’s strategic use of negotiation skills in mining contracts
Botswana's experience with its diamond industry stands as an ideal case study of how skilled negotiations can yield favorable deals for African countries. Through tacit negotiations with multinational companies like De Beers, Botswana has secured a revenue stream for financing its development projects profitably and sustainably.
This success can largely be attributed to Botswana’s early and deliberate investment in internal Human Resources and capacity development. Following independence in 1966, the Botswana government under the leadership of Sir Seretse Khama, Botswana's first president, prioritized the development of local expertise in administration, law, economics, and geology. These experts learned from experienced consultants and foreign administrators after independence. Instead of hasty resource nationalization, Botswana adopted a pragmatic approach: building trust while steadily increasing its control and share of the diamond value chain.
One of the earliest successes was the creation of Debswana. Debswana was formed as the De Beers Botswana Mining Company on 23 June 1968, after De Beers and Bostwana geologists jointly identified diamond-bearing deposits at Orapa in the 1960s. Over the next five years, through skillful, phased renegotiations, Botswana secured increasingly favorable terms without jeopardizing the stability of the venture, the government increased its ownership stake from an original 15% to 50%. However, over time, Botswana have also renegotiated for the relocation of De Beers' rough diamond aggregation and sales functions from London to Gaborone in 2013, an extraordinary job-creating and industrialization victory for an African state over a powerful multinational corporation.
Botswana’s negotiations were guided by its national development agenda. Revenues from diamond mining were channeled into public infrastructure, education, and health systems, helping Botswana achieve one of the fastest economic growth rates in the world and making it an upper-middle income country (UMIC) with an aspiration of becoming a high-income country. The government’s long-term planning and fiscal prudence minimized the risks of the so-called "resource curse" that plagued many other resource-rich nations.
Botswana’s relative political stability, low corruption, and a commitment to inclusive economic policies created the environment necessary for effective negotiations. The country’s leaders understood that negotiation leverage does not solely arise at the bargaining table, but also from the domestic political, legal, and economic institutions that back negotiators with credible alternatives and long-term strategies.
In contrast to many African countries where mining deals are renegotiated under pressure, often after disputes or crises, Botswana’s timed and periodic renegotiations allowed it to continually improve its position without conflict. The government’s ability to gather and leverage accurate geological data, recruit top-tier advisory teams, and maintain a reputation for honoring contracts made Botswana a partner that De Beers could not easily bypass or pressure.
Thus, Botswana’s case illustrates that excellent negotiation skills are a necessity for the extractive sector of Africa. Botswana demonstrates that by building technical expertise, ensuring political stability, and consistently prioritizing national development over short-term gains, mineral-rich African countries can significantly improve the outcomes of their mining agreements.
Policy Alternatives/Recommendations
In view of the failures in the mining sector, and from the Botswana case study coupled with the guidelines set forth by independent think tanks, and available research and literature, the below serve as a policy alternative to help Africa derive meaningful revenue from its mining contracts.
1. Establishing permanent negotiation units across all ministries and agencies that are often involved in the negotiation process of mining contracts. These units should be staffed with interdisciplinary negotiators trained and experienced in Mining laws, Economic development, Geophysics, environment, and community development. There should also be collaboration and cross-referencing among those ministries and agencies to ensure they negotiate with a correlated strategy. These units should be given clear mandates and job descriptions to ensure that every aspect of a mining deal, from technical feasibility to environmental and social impact, is rigorously analyzed and skillfully negotiated. Governments can seek support from institutions such as the African Legal Support Facility (ALSF) to provide technical assistance and negotiation training.
2. Governments should adopt policies that mandate the full public disclosure of all mining contracts, as recommended by the Extractive Industries Transparency Initiative (EITI) standards. Transparent contracts will enable civil society organizations, journalists, and citizens to scrutinize agreements, ensuring that they align with national interests and benefit local communities.
3. Establishing university tracks and scholarships in extractives law, mining economics, and community rights. These institutions would produce a new generation and a continuous supply of highly skilled negotiators, ensuring that technical expertise is homegrown and sustainably maintained within the continent. This can be complemented with negotiation fellowships, in service training programs, and international placements to gain experience of best practices in contract negotiations.
4. Governments should develop clear guidelines for community benefits and environmental safeguards to guide the negotiation process and be incorporated in mining contracts. This will make it easy to legally oblige mining companies to invest in the development of local communities through infrastructure projects and environmental renovation and restoration at the close of mines thus reducing the social tensions often associated with resource extraction. A great deal of this approach and contract models have been drawn from the process and results of the International Bar Association’s Model Mining Development Agreement (MMDA). The MMDA thus provides a menu for negotiators and officials to consider, and a set of options set out in a non-case-specific context.
5. Auditing existing mining contracts to identify unjust terms and prepare for renegotiation. Once the mechanisms for improved negotiation have been established, governments should strive to review all current mining contracts to ensure that there is adequate revenue for the state, as well as community and environmental safety.
Building leverage: Preconditions for successful mineral negotiation
For governments' negotiators to be able to effectively negotiate mining deals, governments should strive to fulfill the following prerequisites.
1. Maintain updated and transparent geological data: Access to accurate and independently verified geological data strengthens a state’s position. Governments must invest in public geological surveys, data digitization, and valuation tools, allowing them to push back against corporate underreporting or strategic misinformation, as highlighted in a World Bank project appraisal to Nigeria in 2017. Negotiations are won with facts and persuasion. Real-time geological mapping, production tracking, and revenue modeling will strengthen the position of government negotiators at the table. For this, States can partner with think tanks such as the African Mineral Development Centre (AMDC), the Africa Centre for Energy Policy (ACEP), and a host of others that are providing technical support for sustainable resource governance in Africa.
2. Legal and technical support from ALSF and partners: The African Legal Support Facility (ALSF) hosted in all AfDB offices across the continent, provides technical and legal assistance to African governments in complex commercial negotiations. Countries should use ALSF’s contract templates and benchmarking tools to compare proposed terms against global best practices and to train homegrown negotiators. Partnering with ALSF ensures that countries are not alone when sitting across from mining giants, and that they have access to model contracts, fiscal benchmarks, and renegotiation strategies.
3. Regional cooperation via the AMDC framework: The African Minerals Development Centre (AMDC), encourages collective action and alignment under the Africa Mining Vision (AMV). Its signatories will benefit from
• Training and resource governance fellowships
• Development of harmonized legal frameworks
• Support for national mineral policies that include equity, environmental safeguards, and community benefit-sharing
• Access to templates for Community Development Agreements (CDAs), local benefit sharing, local content requirements, and environmental standards for environmental impact mitigation that protect mining communities
Conclusion
Africa’s mineral wealth should be a blessing, not a curse. With the right negotiation skills, governments can transform mining deals into development drivers. Funding schools, hospitals, infrastructure, and local industries while protecting the environment and honoring community rights. The path has already been paved by countries like Botswana. Now, with access to institutions like the ALSF and AMDC, mineral rich countries have the potential to negotiate equitable deals. African states must master skilled negotiation to reclaim value from their minerals and redirect it toward inclusive development. The continent can rise from being a supplier of raw materials to a negotiator of its future. The time to invest in this capacity is now, before the next cycle of resource deals locks countries into another generation of inequality.
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