Mining companies operating in unstable parts of West Africa have effectively created their own security forces as governments lose control of territory, according to George McLeod, a partner at Critical Risk Team.
In countries such as Burkina Faso and Mali where local governments seem to lose their power, mining companies are able to create their own security strategies to keep operations going no matter who has the power, McLeod told host Adrian Pocobelli on the latest episode of The Northern Miner Podcast.
“What the mining companies have done is turn their mines into many states. Rather than relying on the degrading local militaries, they basically created their own mini armies of security,” McLeod said.
“On a broader level, mining companies don’t necessarily do badly in this type of situation. In a situation where the central government is crumbling and these companies have turned themselves into almost mini states, I guess it’s not really the worst situation for them,” he said. “So I’m not sure that these companies are that unhappy with the current situation.”
McLeod said governments have become almost irrelevant in some areas where mining companies operate.
“Unlike other sectors like manufacturing or services, mines really just need a reliable way to get supplies in and concentrate out; they don’t really need that much more than that,” he said. “And this is a very interesting case study in how mining companies can continue to operate, maybe even thrive in a complete and total power vacuum.”
End of China’s dominance
For McLeod, China is in its last breath of control and influence over the rare earths market and regulations.
“I would say they have at maximum about 3 years left before the west including Australia, the US and Brazil and other countries as well before they get their own refining capacity online,” he said.
China’s tightening of export controls and regulations is accelerating efforts to find alternatives, while technological changes could reduce demand for some rare earths, McLeod said.
“It’s sort of their last gasp before they lose control over this very important segment. There’s substitution taking effect, other technologies being used in electric vehicles that would completely bypass rare earths,” he said. “So given the way the mining sector works and we all know that this has happened in past cycles you know once everybody gets these new processing and mining operations online, then it moves to the opposite situation of a plot.”
Listen to the full episode:
Source: https://www.mining.com/mining-companies-built-mini-armies-in-risky-regions-expert/
