Mining companies built ‘mini armies’ in risky regions: expert
Mining companies are relying on private security to keep operating as government authority weakens across West Africa.
Mining enterprises have established their own private security units in precarious regions of West Africa, according to George McLeod, a senior colleague at Critical Risk Team. In nations like Burkina Faso and Mali, where national governments have lost their grip, mining companies are able to devise their own security measures to maintain operations regardless of the prevailing power dynamics, McLeod informed Adrian Pocobelli on the latest episode of The Northern Miner Podcast.
"The mining firms have essentially turned their mines into independent states, relying on their own private armies of security instead of the deteriorating local militaries," McLeod explained. "On a larger scale, mining firms do not necessarily fare poorly in such scenarios. When the central government is collapsing and these companies have created their own mini-states, it may not be the worst situation for them," he added.
"I'm not sure these companies are unhappy with the present circumstances." McLeod noted that governments have become virtually insignificant in certain areas where mining companies function. "Contrary to other sectors like manufacturing or services, mines only require a dependable means of supplying and concentrating materials; they do not necessitate much more than that," he stated.
"This is an intriguing case study on how mining companies can continue to function, possibly even flourish in a complete power vacuum." McLeod believes that China is nearing the end of its control and influence over the rare earths market and regulations. "I would say they have at most about 3 years before the west, including Australia, the US, and Brazil, among others, establish their own refining capacity," he remarked.
"China's tightening of export controls and regulations is hastening the search for substitutes, while technological advancements could diminish the demand for some rare earths," he continued. "It's essentially their final attempt before they lose their grip on this crucial segment. As we all know, substitution will prevail once the mining sector's new processing and mining operations are up and running."
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