Russian setbacks change landscape in the Sahel, ft Critical Risk Team’s George McLeod

Key Concepts

• Rare Earth Elements (REEs): Critical minerals essential for high-tech magnets, defense technology, and electric vehicles (EVs).
• Resource Nationalism: The trend of governments (e.g., Guinea, Mali, Niger, Indonesia) asserting greater control over their natural resources, often through export bans, quotas, or forced local processing.
• Geopolitical Weaponization: The use of trade restrictions and export controls as diplomatic levers in international disputes.
• Supply Chain Diversification: The G7’s strategic goal to reduce reliance on any single country (specifically China) for more than 60% of critical mineral imports by 2030.
• "Dark Transits": The practice of disabling vessel tracking systems to bypass trade blockades or sanctions.

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1. Rare Earths and Geopolitical Tensions

China has intensified its use of export controls as a retaliatory measure against the U.S. and its allies.

• Entities List: Beijing added 10 U.S. companies—including USA Rare Earth, MP Materials, and motor manufacturer EVX—to its "entities list," restricting their ability to trade with Chinese firms.
• Japan Supply Squeeze: China has effectively halted exports of heavy rare earths (dysprosium, terbium, yttrium) to Japan, a move linked to diplomatic friction over Taiwan.
• G7 Strategy: The G7 nations have pledged to limit their reliance on any single country for rare earths to 60% by 2030, aiming for 50% thereafter. They plan to coordinate stockpiling and increase investment in recycling and new mining projects.

2. Strategic Investments and Loans

Western governments are aggressively funding domestic midstream processing to break the Chinese monopoly:

• Energy Fuels: Received a $725 million conditional loan from the U.S. Department of War to build a domestic rare earth separation and metallization facility.
• Iluka Resources: Secured a $1.15 billion loan from the Australian government to complete the Eneabba rare earths refinery, which will be Australia’s first fully integrated facility.

3. Resource Nationalism in West Africa

West African nations are increasingly emulating the "Indonesian model" (banning raw exports to force domestic refining):

• Guinea: President Mamady Doumbouya has banned raw gold exports to encourage local processing. Additionally, the government is pressuring bauxite miners to move toward alumina refining.
• Mali & Niger: These nations are facing severe instability due to jihadist insurgencies (notably the JNIM group). Despite Russian military presence (Africa Corps), security has deteriorated, leading to a "weak state" environment where mining companies are increasingly forced to operate as autonomous, self-sufficient entities.
• Zijin Mining: China’s regulators paused a $4 billion acquisition of Allied Gold, signaling a growing weariness regarding the security costs and risks associated with African investments.

4. Aluminum and Copper Market Dynamics

• Aluminum: Despite fears that the Iran conflict would cause a supply crisis, the market has remained resilient. Producers utilized "dark transits" and complex logistics to reroute alumina through the Strait of Hormuz, keeping smelters operational.
• Copper: The market is currently in a "wait-and-see" mode regarding potential U.S. tariffs on refined copper, which are expected to be decided by the end of June.

5. Revival Gold: Case Study in North American Development

Hugh Agro, CEO of Revival Gold, highlighted the company’s strategy of redeveloping past-producing sites in the U.S. to mitigate geopolitical risk:

• Projects: The Mercur project (Utah) and Beartrack-Arnett (Idaho).
• Strategy: Focusing on private land and brownfield sites to shorten permitting timelines.
• Value Proposition: Revival Gold holds 6 million ounces of gold in resources with a low-risk profile, positioning itself as a key developer in a jurisdiction (the U.S.) that is increasingly prioritized by major gold producers.

6. Expert Perspective: George McLeod (Critical Risk Team)

• The "Autonomous Mine" Reality: In unstable regions like Mali, mining companies can no longer rely on state infrastructure or Western military support. They must provide their own security and logistics.
• Technological Asymmetry: Insurgent groups like JNIM are effectively using low-cost drone technology to disrupt operations and state security, mirroring the asymmetric warfare seen in the Middle East.
• Myanmar: Despite its mineral wealth, Myanmar remains a high-risk, lawless jurisdiction where mining is largely concentrated in rebel-held areas, making it an unlikely candidate for mainstream investment.

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Synthesis/Conclusion

The global mining landscape is undergoing a fundamental shift. The era of relying on globalized, frictionless supply chains is ending, replaced by a "geopolitics of scarcity." Western nations are pouring billions into domestic midstream processing to decouple from China, while developing nations are aggressively pursuing resource nationalism to capture more value. For mining companies, the takeaway is clear: success now requires extreme self-sufficiency in security and logistics, and a strategic preference for stable, low-risk jurisdictions like North America.