Cote d'Ivoire: Aggressive Mining Regulation Changes Signal Hardening Stance Towards FDI

What happened: Gold mining companies began paying an 8% royalty on revenues that was introduced arbitrarily by the government and heavily contested by investors.

Why it matters: The move signals increased government hardening toward mining companies and undermines the sanctity of contracts in the natural resource sector.

What happens next: The change will impact government-investor relations in the mining sector and the ongoing new mining code discussions in Abidjan, as well as future conversations regarding the planned new petroleum code.

On 16 December, gold mining companies began paying an 8% royalty on revenues, up from the previous range of 3-6%.

The new royalty was initially sought by the government in early 2025 but had prompted much resistance from mining companies, which claimed that they were protected from fiscal changes by their contracts and had entered into negotiations with the Ouattara administration to force it to reconsider. However, these negotiations appeared to make little headway, and mining companies have eventually acquiesced.

In our view, the aggression with which the government has approached the gold mining sector indicates a hardening of stance toward foreign operators across the natural resource sectors.

The Ouattara administration previously maintained that it has an open-door policy and is eager to keep foreign investors on side. However, these arbitrary changes to mining sector regulations suggest that such an approach may be waning in favor of greater resource nationalism.

This trend is compounded by reports from our sources in Abidjan that the government is increasingly arrogant and aggressive in its discussions with foreign companies. This likely reflects a sense that the mining and oil and gas sectors are growing rapidly, which gives the government greater leverage in negotiations.

The growing noise around the Ivorian mining sector is exacerbating this dynamic. For instance, at the September 2025 African Down Under conference in Perth, Australia, Cote d’Ivoire was heralded as a new contender among global mining giants.

The belief that the government now has the upper hand vis-à-vis foreign companies raises several difficulties for investors. As the government proceeds with discussions surrounding the introduction of the new mining code — due early this year — it will likely be more bullish in terms of the new legislation than had previously been anticipated. We expect the Ouattara administration to push for more significant royalties and reduce tax exemptions for foreign companies going forward.

We anticipate a knock-on effect for the oil and gas sector as well. The planned new petroleum code, set to be introduced in 2027-2028, should introduce a reduction in tax exemptions and perhaps changes to foreign exchange controls.

Whereas the government previously did not want to irk foreign investors and would only introduce changes that were acceptable to operators, the unilateral amendments to mining regulations in recent weeks suggest otherwise. There is now a slightly higher risk that when the new petroleum code is introduced, new terms will be applied retrospectively.

In the meantime, contract sanctity has clearly been undermined in the mining sector, and this may set a precedent for action in the petroleum sector. For instance, if the government wanted to change foreign exchange controls or increase the requirements of the local content law, it is less certain that it would accept the principle that existing contract terms shield companies from these kinds of changes.

In this respect, we recommend monitoring ongoing relations between the mining sector and the government to understand how far the Ouattara administration is willing to go. The government is currently discussing with mining companies whether they will be fined for failing to pay the increased mining royalties since they were first introduced.

If the government imposes penalties on mining companies for this perceived transgression, it will be further indicative of increasing government aggression. This would presage more aggressive action in the petroleum sector as well.

Crucially, while there are many similarities between the way that the mining and petroleum sectors are developing, and there is always likely to be some crossover in regulations between the two, there is an important caveat. The price of gold, which has been soaring since US President Donald Trump began his second term, has likely played a minor role in the royalty changes to the mining sector.

The government was eager to capitalize by increasing royalties, while it likely also calculated that the foreign operators could better absorb the costs due to the strong market conditions. This rationale was borne out by the fact that mining companies did acquiesce to the changes after less than a year of negotiations.

Where these conditions do not apply, the government may opt to be less aggressive, with some potential mitigating effects for the oil and gas sector.