Mining Arbitrations in Africa

Audley Sheppard QC, Amanda Murphy and Karolina Rozycka, Clifford Chance LLP This is an extract from the 2021 edition of GAR’s The Middle Eastern and African Arbitration Review. The whole publication is available here. In summary Increased demand for certain commodities (such as gold, iron ore, copper and some rare earth metals) following the global disruption caused by covid-19 will naturally result in increased foreign investment flow to those countries that are endowed with such resources. Depending upon the response to this demand, states may be exposed to the risk of claims and arbitration. Although resource nationalism continues to be one of the greatest challenges currently facing investors, several African countries (such as Egypt and South Africa) have recently shown willingness to liberalise their approach to foreign investment in the mining sector. One of the major ways in which political risk can be mitigated by an investor is by entering into a host state agreement, which may provide, among other things, stabilisation of the applicable legal framework and recourse to international arbitration in the event the stabilisation provision is breached. Social and environmental concerns are invariably associated with mining projects, and so these issues are also an increasingly common feature of mining disputes and arbitration in Africa. Source