Mergers, Acquisitions and Partnerships Fuel Africa’s Mining Expansion while Strengthening Resilience

 

Opportunities for mergers, acquisitions and partnerships in Africa’s mining sector are growing, but ensuring long-term resilience remains critical for companies engaging in these transactions, a panel on Mergers, Acquisitions, and Partnerships: Building Resilience in a Consolidating Industry at African Mining Week 2025 highlighted.

According to Jude Kearney, Managing Partner at Africa-focused law firm ASAFO&Co., while consolidation often drives greater efficiency and benefits in host jurisdictions, it can also leave gaps when an acquired company’s activities are not carried forward by the acquirer.

Zach Kauraisa, Head of Advisory at Namibian private equity firm Eos Capital, highlighted that one of the primary drivers of mining M&A activity is the ability to unlock synergies by cutting costs and optimizing revenues. In Africa’s high-risk jurisdictions, consolidation can also strengthen a company’s footprint, making it a larger contributor to government tax revenue, a bigger employer, and a more significant economic player in the host country.

This, he explained, not only enhances negotiation power but also provides merged entities with a stronger social license to operate and greater capacity to reinvest into local economies.

David Roney, Chief Executive Officer of US-based global law firm Sidley Austin, noted that the wave of consolidation across Africa’s mining sector could also serve to elevate environment, social and governance performance and social license standards on the continent, specifically in the case of larger companies acquiring smaller ones. “Securing a strong social license to operate remains one of the most effective risk mitigation strategies available to mining companies,” he emphasized.

Roney noted that, alongside a strong social license to operate, companies should also adopt complementary legal safeguards. These include investment treaty protections, host government agreements with stabilization clauses, and adherence to principles of international law — all of which can help mining firms navigate regulatory uncertainty and strengthen resilience in cross-border transactions.

Roney further pointed to the rise in regulatory scrutiny on foreign investment flows, driven by recent geopolitical shifts and new industrial policies. He explained that M&A transactions are increasingly being assessed through this lens, adding extra complexity to approval processes. “We expect to see similar dynamics unfold in Africa, given the continent’s significant critical mineral reserves,” he said, noting that this could create a more complex investment environment in Africa.

Kauraisa highlighted tensions between governments and mining companies over local beneficiation in Africa. While increased local jobs, investment, taxes, and capital spending are key objectives for governments, the private sector has often been hesitant due to low margins in beneficiation activities.

“As governments increasingly call for greater in-country beneficiation, their participation in funding infrastructure makes these initiatives more viable and attractive for mining companies,” he explained.

Distributed by APO Group on behalf of Energy Capital&Power.

About African Mining Week:
Organized by Energy Capital&Power, African Mining Week serves as a premier platform for exploring the full spectrum of mining opportunities across Africa. The event was held alongside the African Energy Week: Invest in African Energies 2025 conference from October 1-3 in Cape Town. Sponsors, exhibitors and delegates can learn more by contacting sales@energycapitalpower.com.