However, since most Russian mining operations in Africa are joint ventures that depend in part on Russian funding, it is possible that the sanctions will temporarily disrupt mining operations and production levels as Russian funding is limited or cut off entirely.

“We expect the disruption to projects in which Russian miners hold stakes to be temporary, and the prevailing high price of most commodities will ensure there will be no shortage of buyers on the market. market for these concessions,” the report said.

The analysis believes that the sanctions will limit the ability of Russian miners to repatriate profits and proceeds from the eventual sale of concessions.

Since the sanctions are not yet fully enforced, Russian miners are still able to continue operating in Africa by repatriating profits, clearing foreign currency and conducting international transactions through unauthorized Russian banks. or their foreign divisions.

“The risk of widening sanctions in the short term is high. However, we expect Russian miners to be able to find ways around these sanctions and continue operations before potential solvency issues force them to liquidate and sell their concessions at a discount.” , indicates the document.

The Economist Intelligence Unit also forecasts commodity prices to remain high throughout the conflict, building on coronavirus-related price growth in 2021, with aluminum prices expected to jump more than 40% at $3,213/tonne, nickel prices rise nearly 35% to $10.52/lb, copper prices are expected to reach $4.54/lb in 2022 from $4.23/lb in 2021, and gold prices are expected to reach $1,897/troy oz in 2022, from $1,800/troy oz in 2021.

“The disruption in commodity markets will benefit African oil and gas producers – Nigeria, Angola, Gabon, Libya, Algeria, Egypt, Congo (Brazzaville), Ghana, Equatorial Guinea and Chad – who will benefit from a major financial windfall and increased investments. Commodity producers such as South Africa and the DRC will also notably benefit from higher prices. Smaller producers will also benefit from rising commodity prices: Zambia will benefit from high copper prices and Botswana from high diamond prices,” the filing said.

The role of inflation

For the market analyst, while higher prices will benefit current production and operations, inflation will disrupt exploration activities for potential projects. Additionally, high energy costs, coupled with increased global risk and uncertainty, will increase project development costs, and this will be the case even for operations without Russian stakeholders.

Some African states could, however, benefit from this disruption of potential operations. These include natural gas producers such as Nigeria, Algeria, Senegal, Mozambique, Angola and Sudan, which are set to receive massive investment as Europe seeks gas from sources other than Russia.

Unofficial mining

When it comes to projects that are wholly owned by Russian miners, especially in countries where governance standards are weak, Russian actors should continue to secure mining rights and trade raw materials.

According to The Economist, such is the case of the Dian-Dian project, the largest bauxite mine in Guinea, 100% owned by Rusal, as are the bauxite mines of Kindia and Friguia.

“Russia is also believed to be active in mineral trafficking networks in African countries such as Sudan and CAR,” the report said. “In such cases, we expect sanctions to have little impact on Russian mining operations. Russian miners will find ways around sanctions by using unauthorized banks or relying on a form of barter in more authoritarian states, with Russia supplying weapons and mercenaries in exchange for mining output.

Analysts at The Economist say that as Russia becomes increasingly cut off from the West, it will aggressively seek allies and build influence to secure additional mining concessions.

“This will have important implications for African politics, as Russia seeks to create and profit from African instability, particularly among resource-rich countries, as it increasingly isolates itself from the West.” , underlines the document. “The growing division among African states as the sphere of influence doctrine reemerges, as evidenced by Africa’s varied turnout in the UN Security Council vote on condemnation of the Russian invasion, reduce pan-African solidarity and adherence to African multilateralism”.