That plan has gone seriously—and perhaps irreversibly—awry. 

The mine, with around $2 billion at stake, is among a number of projects around the world caught in an increasingly tense geopolitical struggle for valuable metals and minerals. Two world superpowers—the U.S. and China—are bankrolling much of the investment to power their economies, which in turn is leading developing countries where the mines are located to push for a greater slice of the profits. 

At about 7:30 a.m. on Oct. 16, 2023, Warburton was dining with the mine site manager and geologists when an army colonel arrived and ordered all expats off the site, citing a security issue.

Warburton spied machine guns cradled in soldiers’ arms and mounted on white pickup trucks. Dozens of soldiers flanked the dozen or so expats, then drove them away from the mine to a nearby town. 

“It was scary,” said Warburton, executive chairman of an Abyssinian Group company. “They were army soldiers with automatic weapons. And if they say move, you move.”

A unit of the Abyssinian Group had been exploring the area since 2021 in a joint venture with a state government-backed mining company. Under the terms of the agreement, the Abyssinian Group would bear the costs of the exploration and get 51% of the project’s profits, with the rest going to its local partner. 

But now the government was asking for cash outside the bounds of the agreement.

Abyssinian offered to pay tens of millions of dollars to resolve the spat if the government satisfied certain conditions, but its exploration license was revoked in August. In October, its country director, Ali Hussein Mohammed, was summoned by the government to Addis Ababa, Ethiopia’s capital, ostensibly to continue the discussions. Instead, he was taken to a detention center, where he remains. 

The government says Mohammed mined lithium and exported it without proper authorization, a claim his lawyer and the Abyssinian Group deny. His lawyer says the detention is unlawful as no formal charges have been brought against him. 

“This situation is extremely frustrating,” said Stephen Miller, an Abyssinian Group executive, who added that the company had been invited to deploy its money and expertise in Ethiopia in part to benefit the country. “We’re now being pushed to one side. This is a unicorn of a project.”

Racing for resources

The Abyssinian Group’s experience is just one of many examples of resource nationalism that have cropped up around the world, from Mexico to Mongolia to parts of Africa. While host governments and miners have sometimes been at odds in recent decades, lawyers and executives say they have never seen arrests and nationalist actions at this level.

Risk analysis firm Verisk Maplecroft said last month that 72 of the 198 countries it tracks in a resource nationalism index have recorded a significant increase in interventionist policies and protectionism over the past five years. 

Helaina Matza, a U.S. State Department official, said while countries should expect fair investments into their mining sectors, the U.S. is concerned about the “increasingly aggressive actions” toward Western investment in some markets. 

Investors worry about pouring big sums of cash into mines that can cost billions of dollars to build, only for governments to later shift the goal posts, said John Ciampaglia, senior managing partner of precious metals and critical materials-focused Sprott. Toronto-based Sprott manages roughly $33 billion in assets. 

It is common for governments to try to wring more from miners when commodity prices rocket and fatten company profits. And it is now generally understood that a larger percentage of benefits should flow to local communities, many in countries that were previously exploited for their raw materials.

These days, many governments are strapped for cash after borrowing surged during the pandemic, and are looking for ways to replenish their coffers. 

In addition, “host countries are seeing just how important these minerals are to the U.S. and China,” said Jeffery Commission, a director at Burford Capital, a legal finance company that has funded companies involved in mining disputes.

Yet industry participants say there is a difference between bilaterally rejiggering mining rights and a government using intimidation to wrest more control. 

The tactics being used are different than in the past and are “borderline criminal at this stage,” said Damien Nyer, an international disputes partner at law firm White & Case. “People getting arrested and held as hostages, as bargaining chips—it’s something I haven’t seen in my career.” 

Sprott’s Ciampaglia said his team has become much more cautious backing companies in some places, particularly in West Africa. 

Panama stunned the global copper market little more than a year ago when a court ruling forced the closure of First Quantum Minerals’ Cobre Panama mine, which accounted for roughly 1.5% of the world’s copper production.

“Cobre Panama is a really good example,” said Ciampaglia. “You thought you were investing in a copper mine in Panama but, in reality, you were investing in a political party in Panama.”

Global shift

In Mali, the Russia-allied military government has recently netted almost a quarter-billion dollars in payments from international mining companies including Canada’s Barrick Gold. 

Mali last month issued an arrest warrant for Barrick Chief Executive Mark Bristow. In September, it briefly detained four Barrick employees, releasing them only after the company agreed to a payment of $85 million to “resolve outstanding disputes.” Since then, several employees have been imprisoned on unfounded charges, Barrick said.

Barrick said that gold shipments have been blocked and, if that continues, it will be forced to suspend its operations in the country. 

Australia’s Resolute Mining recently agreed to pay the Malian government $160 million after authorities detained the company’s chief executive and two other employees for nearly two weeks. 

?The Democratic Republic of Congo recently froze some assets of commodity giant Glencore amid a royalties dispute. The freeze was lifted in recent months, a person familiar with the matter said. 

Searching for recourse

Miners are turning to international arbitration to get compensation for the seizure of their mines or licenses. Since the pandemic, mining cases have exploded at a division of the World Bank that oversees investment disputes.

The Abyssinian Group and Barrick are submitting cases to that body. The Abyssinian Group will petition for a multibillion-dollar claim, corresponding to the value it places on its lithium reserve, people familiar with the situation said.

Miners have been heartened by outcomes in some recent cases. Bronwyn Barnes, executive chair of Australian exploration company Indiana Resources, filed a case in 2020 after Tanzania changed its mining code, yanked her company’s operating license and seized the spot where a potential nickel mine would go.

The company was awarded more than $100 million to cover its sunk costs on the project. Tanzania and Indiana Resources last year agreed to a settlement of $90 million.

Government officials in Ethiopia, Mali and Tanzania didn’t return requests for comment.

Abyssinian’s Warburton spent chunks of his earlier career working on projects in Africa, including in Mali. The lithium project in Ethiopia was intended to be the swan song of a more than four-decade career. 

“Certainly, I’m never going back there,” he said.