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Landlord-tenant relationship with global mining firms is failing Africa

Imagine you’re the landlord of a prime piece of real estate in the middle of a booming city. You lease it out to a tenant for 25 years at a flat monthly rate, with no right to revisit the rent based on market conditions. The tenant then builds a luxury apartment complex, earns millions each year, while you collect the same modest sum for decades. Worse still, during the lease, you can neither live in the property, resell it, nor use it to raise money.

If this sounds like a ridiculous deal, it’s because it is.

Yet, this is precisely how many African governments have structured their agreements with multinational mining companies through mineral concessions.

Much like that hypothetical landlord, African states technically own their mineral resources. Constitutions across the continent enshrine this principle of sovereignty over subsoil assets. But when it comes to practice, many governments sign long-term concession agreements that hand operational control and the lion’s share of profits to private companies, often foreign-owned. These agreements stretch across decades, contain rigid stabilisation clauses, and are rarely subject to meaningful public scrutiny.

But let’s take the analogy further. In a typical tenancy agreement, the landlord retains some flexibility: to raise rents, to inspect the property, to terminate the lease under certain conditions. In bankruptcy law, creditors can recover and repossess assets if a company mismanages its obligations. The system is designed to preserve the rights of the underlying asset owner and ensure that economic realities are reflected in legal rights.

Moreover, relying on concession models undermines financial sovereignty. Credit rating agencies, multilateral lenders, and sovereign bondholders look at governments’ ability to generate future revenues. If governments cannot count their mineral wealth as assets—because they’ve signed away control for 25 years—they appear poorer and riskier than they really are. This translates into higher borrowing costs and diminished fiscal space.

Why is the mining sector different?

Why do governments, the ultimate landlords of some of the world’s most valuable mineral properties, accept contracts that strip them of all meaningful leverage?

The answer lies in the long-standing narrative pushed by a powerful and concentrated mining industry: that mining is uniquely risky and capital-intensive. Therefore, they argue, only highly favorable and stable terms will attract the necessary investment. But the truth is more complex. Mining companies are not philanthropic investors. They are rational actors responding to incentives. And like any tenant, they will push for the best deal they can get away with.

There is no economic or legal necessity that requires governments to give up so much control. In fact, global practice offers a menu of alternative models.

Take production sharing contracts (PSCs), commonly used in oil and gas. Under a PSC, the government retains ownership of the resource. The private firm bears the exploration and production risk but recoups its investment from a share of the production. The remainder—the profit minerals—is split with the state. This model ensures that the government has a direct stake in the output and can benefit from price upswings, without needing to operate the mine itself.

Then there is the joint venture model. In countries like Botswana, where the state owns 50% of Debswana, a diamond company co-managed with De Beers, the government has a seat at the table and a more direct line to profits. It’s not perfect but at least the returns have helped finance public infrastructure and social programs, helping Botswana lift itself to middle-income status.

Other models include equity participation with carried interest, whereby governments receive shares in the mining company without upfront investment, and can later use their dividends or buy more equity. Or, there are mineral-backed financing structures, where governments pre-sell future production to fund current development needs.

All of these approaches have something critical in common: they treat the state as an economic actor, not a passive landlord. They allow governments to reflect the value of their resources in national accounts, to borrow against future revenues, and to participate in governance and oversight. In short, they restore the landlord’s rights.

The cost of sticking to outdated concession models is steep. Not only do they deprive governments of revenue, but they also limit strategic control over minerals critical for the green transition—lithium, cobalt, graphite, and more.

As the world races toward decarbonisation, we know that Africa sits atop significant reserves of these materials. Concession agreements signed today will determine whether African economies will be mere suppliers of raw inputs or co-architects of global energy systems.

What should African governments do?

First, they must reject the false dichotomy that it’s either concessional mining or no mining. The evidence is clear: other models exist, and investors will come if the rules are transparent, consistent, and enforceable. What matters more than over-generous terms is clarity and competence.

Second, governments should review existing contracts and publish them. Transparency is the first step to reform. Where renegotiation is possible, it should be pursued, especially for strategic minerals.

Third, capacity building is key. Negotiating better contracts requires skilled lawyers, geologists, economists, and financiers. Regional cooperation—through entities like the African Legal Support Facility or the African Union—can pool expertise and shift bargaining power.

Finally, governments must legislate for the future. New mining laws should prohibit long-term concessions, cap lease durations, and mandate equity or profit-sharing mechanisms. Stabilisation clauses should be time-limited, not eternal. And all agreements should be subject to parliamentary oversight.

The age of the passive landlord is over. Africa can no longer afford to lease away its future for short-term rent. The minerals beneath African soil are not just rocks. They are leverage, they are power, they are assets. It is time to use them accordingly.



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