Natural Resources Law / Resource Nationalism / FDI

The African mining sector remains a cornerstone of foreign direct investment (FDI), attracting major multinational companies due to the continent’s vast mineral wealth. However, recent geopolitical shifts, most notably in Niger, have exposed the growing legal and operational risks foreign companies face amid rising resource nationalism. The ongoing dispute between French uranium miner Orano and the Nigerien government encapsulates these challenges, underscoring critical issues of sovereignty, legal protections, and corporate risk management.

Background: Orano’s Legal Conflict in Niger

Orano has been a key player in Niger’s uranium mining industry for over five decades, with majority stakes in multiple mines, including SOMAÏR and the Imouraren project. However, in late 2024, the Nigerien military government initiated assertive measures:

• December 2024: Seizure of control over SOMAÏR mine (Orano holds 63% stake)
• June 2024: Revocation of the mining permit for the Imouraren uranium project

Following these developments, Orano filed a lawsuit in Niger’s courts alleging:

• Arbitrary arrest and illegal detention of its local mining director, Ibrahim Courmo
• Unlawful confiscation of company assets and electronic devices during raids on its Niamey offices

To date, Courmo remains unaccounted for, and Nigerien authorities have not provided transparency on his status. Orano’s legal response extends to international arbitration proceedings to challenge the revocation of its mining license, emphasizing the significant financial and reputational stakes involved.

Resource Nationalism and Legal Risks

Orano’s predicament is emblematic of a broader continental trend where African states are recalibrating control over their natural resources. Countries in the Sahel region—including Niger, Mali, and Burkina Faso—have increasingly adopted aggressive resource nationalism policies, which have included:

• Nationalization or partial takeover of mining operations
• Arrest and detention of foreign mining executives (e.g., Barrick Gold and Resolute CEOs)
• Stricter regulatory scrutiny and legal actions against foreign firms

While these measures aim to enhance sovereign control and increase local benefits from natural resources, they introduce elevated legal uncertainties for foreign investors.

Legal and Regulatory Implications for Foreign Direct Investment

This shifting landscape poses significant challenges for foreign mining companies and their legal advisors:

• Heightened political and operational risks undermine investment certainty
• Increased litigation and arbitration cases may arise from permit cancellations and asset seizures
• Complex due diligence requirements are essential to navigate local legal frameworks and political dynamics

From a legal ethics standpoint, firms advising on such investments must ensure robust compliance frameworks and risk mitigation strategies. Transparency, thorough contract negotiation, and dispute resolution mechanisms (including arbitration clauses) become indispensable tools.

Balancing Sovereignty and Investment Protection

While resource nationalism aims to secure greater economic gains for African states, there is a delicate balance to strike. Excessive unilateral actions risk deterring much-needed FDI, which provides capital, technology transfer, and employment. Legal frameworks that are:

• Transparent
• Consistent
• Fair

are critical to attracting sustainable investment while respecting national sovereignty.

International legal instruments and bilateral investment treaties may offer some protections, but their enforcement depends on cooperative and predictable governance.

Conclusion

The Orano-Niger case spotlights the evolving legal complexities for foreign mining companies in Africa amid rising resource nationalism. For the legal industry, this necessitates a dual focus on:

• Advising clients on political and regulatory risks
• Advocating for balanced legal reforms that protect both investor rights and sovereign interests

Navigating this dynamic environment requires vigilance, adaptability, and a nuanced understanding of the intersection between law, politics, and business strategy in Africa’s resource-rich regions.