If mining companies speak up against suppression of civil liberties, for instance, they risk losing their licence to operate.
Responsible businesses can thrive only in situations where governments are effective.
Nigeria’s volatility (and a highly corrupt national oil company). However, the historical data strongly suggests that successful democratisation invariably wins the day for aggregate economic performance. This is because responsible businesses can thrive only in situations where governments are effective at the same time as being held to account by their citizens. While it may seem easier to simply pay rents to political elites for the right to extract resources, those rents are often being used to erode the quality of the overall business environment. Mining companies often have to behave like diplomats walking on hot coals – if they speak up against suppression of civil liberties, for instance, they risk losing their licence to operate. If they don’t speak up, they may lose their social licence anyway, or at best inadvertently prop up a regime that is bent on extracting rents and entrenching its power. I don’t have any easy answers here, but it is at least incumbent on mining companies to think about what kind of collective impact they want to have on the overall operating environment. Democratic backsliding hurts everyone in the long run; it might well be worth thinking about what kind of resources can be allocated towards preventing it. n
It seems to me that in cases like this, incumbents like Hassan feel pressure to tighten the noose on civil liberties, either because the party fears that it may otherwise lose power or because Hassan herself needs to satisfy elements of her party that she is sufficiently willing to move in this direction in exchange for their support. Her executive still maintains “significant influence over the electoral structure and decision making”, according to researcher Nicodemus Minde. So what? Well, the operating environment for mining firms is determined by these kinds of political dynamics. Even though mining is a long-term game, it does not escape shorter-term political volatility but has to live through it. Paradoxially, the 2025 Fraser Institute Survey’s Investment Attractiveness Index shows an improvement in Tanzania from a score of 42.08 in 2020 to 62.75 (out of 100) in 2024. It is often easier – initially – to do business in dictatorial jurisdictions. My own PhD thesis showed that between 2004 and 2007 a set of Asian National Oil Companies preferred to do business in Angola than in Nigeria, despite the latter having opened up remarkably since Abacha’s death in 1998. In Angola, dos Santos had ensured that the national oil company operated proficiently, and in the end that gave more surety to investors than
NOVEMBER2025 | www.modernminingmagazine.co.za MODERN MINING 37
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