New year’s resolutions for miners – 2025

The end of the year is, as they say, a time for reflection. Each year for this column, I dust off last year’s and see what resolutions I proposed for mining companies. Notably, I get it wrong in my assessment of sovereign risk and I think 2024 was no different.

An optimist by nature, I tend to think the trajectory of sovereign conduct towards foreign investors arcs towards reasonableness. And whilst jurisdictions like Mozambique and Zambia have demonstrated prudence in dealing with their foreign partners, my optimism was once again misplaced in 2024.

With the emergence of Coup Belt states thumbing their noses at the Western-led international order and cozying up to Russian and Chinese interests, the risks for foreign mining companies in Africa remain high. Meanwhile, the resource nationalist project commenced by Andrés Manuel López Obrador in Mexico shows no signs of abating under his successor, Claudia Sheinbaum.

Hopefully, my misplaced optimism for 2024 will yield some lessons for 2025, so with that, I give you my new year’s resolutions for mining companies, 2025 edition:

Resolve to send the lawyers

When African states demand in-person meetings with company representatives to discuss alleged outstanding tax payments or other unsubstantiated penalties or fines, do not send company executives to attend those meetings. Local executives and lawyers will suffice. There is an unwritten rule that states should not lock up the lawyers. I seem to test that proposition routinely, but so far it has held true.

Resolve to maintain licences in good standing

No matter how good your lawyer is, if you have failed to meet bona fide statutory conditions for maintaining your permit in good standing, they will not be able to obtain sizeable damages from a state that lawfully terminated your concession.

Resolve to recognize that resource nationalism isn’t going away

Whether it’s Mexico or Burkina Faso, sovereigns continue to misguidedly pronounce that their own national companies are better equipped to mine the national resource endowment than pesky foreigners who spent years identifying, exploring and developing an asset. You may have heard them say that this time it’s different, that you’re special, but it’s not different and you’re not special. From junior to major, all companies face the scourge of resource nationalism.

So what to do? Well every year I advise to structure your investments in risky states to ensure recourse to international arbitration in the event of a dispute with the state. But what I also need to tell you is to keep “the receipts”.

 Take a contemporaneous minute of every meeting with government officials, even if they don’t agree to a final version. Record conversations if legal to do so (depending on the laws of the jurisdiction). Catalogue all correspondence and emails. Paper everything over. 

And by all means, don’t say anything in a letter or an email that you wouldn’t want an arbitration tribunal seeing later. 

Resolve to hire lawyers who can win

You wouldn’t hire a consultancy to produce an NI 43-101 who hadn’t done so before, so don’t hire lawyers to negotiate with or bring an arbitration claim against a sovereign who haven’t won a case before.

Arbitration lawyers love to talk about arbitration, but that’s a far cry from bringing a case to hearing, obtaining a favourable award and monetizing that award. Sovereigns know which lawyers to fear, so stick with the winners.

Timothy Foden is partner and co-head of the arbitration group at Boies Schiller Flexner, representing mining companies in disputes with sovereign nations. In 2023 he was named as a “global elite thought leader” in the Future Leaders of Arbitration.