Renegotiating contracts in the extractive and energy industries
Over the past five years, Africa has witnessed a series of debates on the governance of the extractive sector. Contracts have been denounced and challenged by civil society, ruling authorities or political opposition. These cycles are far from new in relations between multinational companies and countries whose subsoil is rich in mineral promise.
From Senegal to Congo, via Guinea, the aim is to go beyond eye-catching figures and announced mega-investments, and to put contracts and conventions themselves to the test in order to safeguard national interests. One common denominator links countries seeking to reshuffle the deck: they have recently experienced political change driven by leaders whose discourse is anchored in sovereignty. Renegotiation is therefore presented as an act of economic sovereignty. Legitimate doubts remain as to whether this is a genuine correction of contractual imbalances or a political trend driven by geopolitics and heightened patriotism under popular pressure.
In Mali, the long saga surrounding the adoption of the Mining Code in 2023, followed by equally protracted negotiations to secure the transition of producing companies to this new code, clearly shows that deep reform of the extractive sector is neither neutral nor easy. In the energy sector, the episode involving the power generation agreement between Albatros and the Government of Mali in Kayes (see box below) likewise illustrates the complexity of designing, negotiating and renegotiating contracts across the mining, oil and energy industries.
This article seeks to explore the drivers behind this wave of renegotiations in Africa, analysing the complexity of extractive contracts, the balance of power between states and multinationals, and the specific challenges of the Malian context. Through concrete examples and a critical reading, it addresses a central question: is contract renegotiation an economic necessity or a political posture?
● A favourable context for renegotiation?
In July 2021, the Publish What You Pay–Mali Coalition submitted a letter to the Malian authorities demanding the publication of the transfer contract of the YATELA-SA gold mine to the Malian state. This action, part of the broader global Publish What You Pay (PWYP) campaign—Disclose the Deal—proved to be a precursor to a wave of challenges to mining contracts in Mali.
Here, as elsewhere, political developments over the past five years—marked by institutional crises leading to regime changes in Mali, Guinea, Senegal, Niger, Burkina Faso and Tanzania—have coincided with moves to renegotiate mining and oil contracts. Cycles of national dialogue have consistently recommended transparency in the management of extractive contracts, providing new authorities with leverage to legitimise or justify revisions of agreements signed by previous regimes.
The global geopolitical context is also cited by specialists to support the trend towards revisiting mining and petroleum codes, leading to fresh negotiations with multinationals. This context has a direct impact on commodity prices. Gold, the ultimate safe haven, rose from around US$1,800 per ounce (about CFA 1,080,000) in 2020 to nearly US$3,450 per ounce (around CFA 2,070,000) in 2025—an increase of almost 92% (note: one ounce of gold equals approximately 31.1 grams). Brent crude oil, after collapsing in 2020 due to the pandemic, recovered to around US$68 per barrel (about CFA 40,800) in 2025, a rise of roughly 55%. Lithium, driven by surging demand for electric-vehicle batteries, saw prices more than triple, representing an estimated increase of over 200%. Production costs, meanwhile, have remained relatively stable in African countries.
To rebalance the equation in a spirit of fair partnership, commodity-producing countries are opting for renegotiation—a choice that carries risks in light of the legal principle pacta sunt servanda (“agreements must be honoured and performed in good faith”).
● Renegotiate, yes—but how?
Nathalie Bernasconi, Director for Europe at the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF), stated during a training seminar on mining contracts that “too often, negotiations are not conducted in a way that allows developing countries to secure a fair share of mining rents. Too often, they fail to maximise the contribution of mining investments to poverty reduction and broader economic and social development. Changing this will require a profound shift in how negotiations are approached.”
While it is accepted that mining and petroleum contracts typically grant the state a share of dividends, the IGF recommends that African states shift their negotiating paradigm towards maximising the value added from the exploitation of their non-renewable natural resources. The President of the Malian Employers’ Association, Mossadeck Bally, advocates a similar approach, urging governments to capture as much value as possible along the extractive value chain.
Local content regulations are gaining traction, signalling a change in vision. Beyond equity stakes allocated to states, companies are encouraged to sustain local economies through domestic investment and procurement. According to the latest EITI–Mali report, in 2023, out of CFA 1,243 billion in supplier transactions, CFA 856 billion—nearly 70%—went to local suppliers. Senegal presents a very different picture: the EITI–Senegal report published in May 2025 shows that foreign suppliers secured contracts worth at least CFA 429 billion in the first half of 2024, compared with CFA 193 billion for local suppliers.
Renegotiation also requires African states to be sufficiently equipped in terms of institutional capacity and strategy to face international experts well-versed in negotiation, complex legal language, fiscal stabilisation clauses and international arbitration. This is without considering the ability of such firms to deploy powerful lobbying efforts that can conflict with African states’ interests globally. Mali experienced this first-hand through international media campaigns unfavourable to its position during renegotiations with companies such as Barrick Gold, B2Gold and Resolute Mining.
● The risks of contract renegotiation
Dr Thierno Diallo, Professor at the Université du Québec à Chicoutimi, recalls that most African countries adopted highly generous investment codes to attract investors, notably through tax exemptions and customs advantages for importing technical equipment and exporting raw materials.
“With these favourable reforms and the rise in global demand for certain minerals since the late twentieth century, investors (Canadian, Australian, Chinese, French, among others) flocked to mining jurisdictions, multiplying large-scale projects—particularly for highly sought-after and increasingly scarce metals such as gold.”
After two to three decades of what are commonly referred to as “attraction codes”, African states—according to the Malian Minister of Mines—are now turning towards “development codes”. The adoption in 2023 of a new Mining Code, which предусмотрed a mechanism for transitioning exploration and exploitation permits from their original regimes to the new one upon renewal, signalled this determination to engage in tough negotiations with existing mining companies. These companies, invoking the principle of fiscal and customs stability, strongly criticised both the revision of the Code and the proposed transition mechanism.
Mali, Senegal, Tanzania, Burkina Faso and Guinea have nevertheless maintained the course of renegotiation, not without risks: the risk of international arbitration, reputational risk affecting a country’s attractiveness, and the risk of declining investment. In the dispute between Mali and Barrick Gold, the International Centre for Settlement of Investment Disputes (ICSID—the world’s leading institution for resolving international investment disputes; see box below) was seized by the Canadian firm. Two law firms—ASAFO & Co and Debevoise & Plimpton LLP—are assisting Barrick Gold. The pedigree of these firms, one based in Paris and the other in New York, has not been sufficient to deter the Malian government. Another potential risk lies in tensions with the home states of mining companies. Mali has thus seen strong involvement by Canadian diplomacy in efforts to resolve disputes with Barrick Gold and B2Gold. The Canadian Ambassador to Mali, Nicolas Simard, held discussions with Malian political authorities to seek an outcome to a dispute with far-reaching consequences.
● Changing the paradigm
Commodity price volatility, technological advances in mining and oil that reduce production costs, and popular demands for contracts that deliver greater benefits to resource-holding countries all make renegotiation an unavoidable step. However, this decision—fundamentally political—requires high-level technical expertise and a clear vision. That vision cannot be limited to a narrow debate over increasing the state’s share of dividends. Renegotiating mining and petroleum contracts in Africa means articulating a coherent approach to an extractive industry aligned with national economic policies, in which domestic companies play a central role. It also means enforcing strict compliance with social, environmental and sustainable development standards—while safeguarding investor interests, whether national or foreign.
In short, the renegotiation of mining and petroleum contracts is far too serious a matter to be left solely to the actors of the extractive industries.
By Baba Sakho.