The second online sharing session of the Jurassic Platform’s “Miner’s Space” was recently held successfully. The theme of this session was “Practical Insights and Experience Sharing on Mining Investment in Middle Eastern and African Countries.” Guests included He Zhijun, Deputy General Manager of China Color Geological Mineral Exploration Co., Ltd. SRK Sun Yonglian, Managing Director of a Chinese company, along with Dr. Lü Guo, founder of Sunshine Chuanyi, and lawyer Yang Guisheng, Senior Partner at Dacheng Law Offices, among other experts, jointly shared their experiences in mining investments in the Middle East and Africa, focusing on the following four aspects.

　 　Non-OPEC Mineral Resource Advantages in the Middle East

　　The mineral resources in which Africa has relatively strong advantages mainly include the following: First, gold deposits, primarily concentrated in central and eastern Africa, are its key mineral resource; second, copper and cobalt deposits, mainly found in the mineral belts of the Democratic Republic of the Congo in central Africa and Zambia; third, rare metals such as niobium and tantalum—Africa boasts several unique ancient granitic bodies that are conducive to the formation of niobium-tantalum deposits; fourth, gemstone deposits. Among the countries in Central and East Africa, Uganda is particularly well-known for its abundant mineral resources, with more than [number] types of minerals already identified. 50 Among these, resources such as gold, cobalt, iron, and niobium-tantalum deposits have favorable endowments and are widely distributed. Several iron ore deposits in eastern Uganda boast extremely large reserves with high-grade content. 67%~68% Kilombe Copper - The cobalt grade of the cobalt ore is at the domestic industrial grade. 5~6 More than double. In addition, the global shares of copper and cobalt held by the Democratic Republic of the Congo and Zambia have reached... 60% and 90%。

　 　Social, Humanistic, and Geographical Overview of Non-Arab Countries in the Middle East

　　When making mining investments in non-Western countries in the Middle East, it is essential to understand and become familiar with these countries’ languages, religious beliefs, infrastructure, communication systems, local internet access, physical geography, local laws, cultural customs, and political security.

　　First, let’s talk about languages. In countries such as Central Africa and East Africa, English, French, and Swahili are relatively widely spoken; Rwandan is also commonly used locally. The Democratic Republic of the Congo was a French colony, so French is the dominant language there. Uganda, on the other hand, was a British colony, and both English and Swahili serve as its official languages. In most countries of Central and East Africa, Swahili is the primary language spoken, while members of the middle and upper classes tend to speak English quite fluently.

　　Second, religious beliefs. In African countries, Christianity and Islam are the predominant religions and enjoy widespread popularity. Religion plays a significant role in social activities, and even many television programs feature content closely related to religion. Religion has a profound impact on mining investors, influencing not only their investment decisions but also determining whether projects can proceed smoothly.

　　Third, the organizational structure of social groups. In some countries in Central and East Africa, when there is a divergence between the views of the central government and those of local communities, the community’s views often prevail. Community opinion leaders and religious leaders may play a significant role in this process.

　　Fourth, infrastructure. Overall, infrastructure in sub-Saharan Africa is relatively underdeveloped. Take Uganda as an example: its roads bear the brunt of Uganda’s transportation needs. 90% passenger transport and 95% For cargo transportation, most highways are primarily two-lane roads. In terms of water transport, Uganda’s Lake Victoria is the world’s second-largest freshwater lake. Lake Victoria borders five countries, and mining investors might consider using waterways to ship some of their supplies to neighboring African nations. If they plan to ship goods back to China, they would likely still opt for transporting them via the port of Mombasa in Kenya.

　　Fifth, communications. The telecommunications sector in non-OECD countries in the Middle East is developing relatively rapidly, yet it remains comparatively underdeveloped. Moreover, electricity supply across Central and East Africa generally remains severely inadequate; for instance, hydropower stations and thermal power plants often experience frequent power outages.

　　Sixth, natural geography and climate: Several African countries—especially those in Central Africa—experience relatively small temperature variations, resulting in an overall mild climate throughout the year, which is divided into a dry season and a rainy season. Due to these climatic conditions, diseases such as yellow fever and malaria are highly prevalent locally, necessitating proactive vaccination for prevention and timely treatment with specific medications.

　　Seventh, security. With the exception of a few countries in Kenya where riots occasionally occur, most countries enjoy relatively stable political environments. In many countries, governments grant extensive rights; mining laws allow Chinese companies, after acquiring mines, to establish their own security forces. These security teams even have the authority to arrest anyone who trespasses into the mine’s territory. Meanwhile, as long as local laws are strictly adhered to, mining rights remain continuous and secure.

　　Eighth, human resources. In many countries in the Middle East and Africa, labor costs are relatively low, and there are quite a few highly educated individuals. However, job opportunities are relatively scarce. As a result, local human resources are both inexpensive and abundant. Locals are familiar with the region’s culture, laws, languages, and social networks, making it possible to actively promote the localization of talent and jointly develop the local economy.

　　 Policies, laws, and investment environment related to non-OPEC countries in the Middle East

　　The institutional framework for mineral rights in non-OPEC Middle Eastern countries is similar to that of China. Countries with relatively favorable mining investment policies include Ethiopia, Tanzania, the Democratic Republic of the Congo, and Uganda. While there are some differences in specific policies among these countries, certain general trends can be observed. For example, both Uganda and Ethiopia broadly encourage mining investments and rank highly in terms of foreign investment approvals and incentives. However, these countries differ significantly in their regulations regarding the granting and holding of mining rights, as well as minimum investment requirements. For instance, in Ethiopia, the minimum investment required for a mining project cannot be less than... 10 A project costs tens of thousands of U.S. dollars, while Uganda does not have similar regulations. Additionally, regarding land use involved in mining projects, mining projects in Ethiopia can obtain either ownership or usage rights to the land, whereas in Uganda, only leasehold usage rights are available.

　　Currently, countries around the world are gradually increasing their openness to mining development. In recent years, Rwanda has introduced several policies and regulations, including tax exemptions for corporate investments and preferential treatment for extending corporate investment periods. Previously, Uganda prohibited the export of raw minerals; from... 2015 The regulations were issued at the beginning of the year, allowing the export of certain raw minerals.

　 　Mining Investment Risks and Experiences in Non-OPEC Countries in the Middle East

　　As a team specializing in cross-border M&A, we must first possess strategic awareness. Second, during the investment process, we will inevitably face risks related to technology, policies and laws, as well as finance, and will unavoidably encounter associated disputes. Therefore, it’s crucial to handle these issues promptly and proactively implement preventive measures beforehand.

　　1. Experience Sharing and Strategies

　　First and foremost, the design of the transaction structure for cross-border M&A deals cannot be overlooked. When investing in Africa, don't simply pour money into the country once approval is obtained—instead, at the very least, establish a structure involving one or two layers of offshore companies to handle equity and asset transactions there. This step is akin to building the “infrastructure” for any project investment. If this infrastructure isn't properly set up, no matter what kind of project you undertake—including real estate—serious problems are bound to arise. In Africa, two particularly good locations for setting up offshore companies are Mauritius and the Seychelles. Both are renowned offshore financial centers with high recognition and great flexibility in their financial, foreign exchange, and capital markets, as well as exceptionally convenient and flexible conditions in areas such as corporate governance and transportation.

　　Moreover, when considering the transaction structure, it’s essential to adopt a global perspective. For investors “going global,” this represents international market investment, technological exchange, and cooperation under market economy conditions. Projects must embrace a global mindset and establish international standards, enabling products to be freely traded in the global market—thus enhancing their timeliness and relevance.

　　Moreover, it’s crucial to align with national policies and overarching strategic directions—especially for state-owned enterprises, which should closely link their efforts with initiatives such as the “China-Africa Fund” and the “Belt and Road Initiative.” Africa is now one of the most promising and in-demand regions of the 21st century. We need to adopt a comprehensive and long-term perspective, because mining investments—particularly greenfield projects—cannot be completed in just a year or two, starting from the stage of mineral exploration at the very least. 3 Year ~5 Year, even 8 Year ~10 Year, so this kind of long-term, macro-level global thinking is extremely important. It involves considerations related to transaction structure design and a globally macro-oriented perspective.

　　2. Technical Specification Risks and Experience

　　Currently, there are two internationally recognized technical standards for mining investment: NI43-101 Reports and JORC Standards—each of the two has its own focus.

　　NI43-101 When initially designed, the report was primarily intended for exploration projects—ranging from greenfield projects to those with existing resources, then moving on to projects with pre-feasibility studies, and finally to construction and production projects. The report features a dedicated template and is divided into: 26 Chapter—there are strict guidelines for both chapters and content requirements.

　　 JORC The full name of the standard is “Australasian Reporting Standards for Exploration Results, Mineral Resources and Ore Reserves.” It is a publicly available reporting standard designed to safeguard and protect the interests of both current and potential mining investors. The reports are primarily aimed at infrastructure and operating mines. 2012 Year edition of JORC After the report is completed, there is “Table 1,” which is divided into several sections: Section 1 covers sampling techniques and data, and requires extremely detailed documentation; Section 2 presents the exploration results; Section 3 provides estimates and reports on mineral resources; Section 4 offers estimates and reports on reserves; and Section 5 is dedicated to diamonds and other gemstones.

　　In addition, the two have different uses—for example, listing in Toronto requires... NI43-101 Report, but raise funds and go public in Hong Kong. NI43-101 Reports and JORC The standards are all recognized. Generally speaking, if an exploration project or a production project seeks financing in Canada, it must use... NI43-101 Report: If infrastructure or production projects are financed and listed in Hong Kong or Singapore, either option can be used. JORC Standard, also usable NI43-101 Report, but use JORC There are many standards. In addition, the two use proper nouns differently and should not be confused.

　　In terms of preparing exploration reports, domestically it is customary to treat resources and reserves as one and the same; in contrast, abroad, the results of exploration are referred to as resource estimates. To convert economically recoverable resource estimates into reserves, at least a preliminary feasibility study must be conducted, taking into account multiple conversion factors. In the course of investment projects in the Middle East and Africa, it is best to involve qualified professionals. This approach ensures that the project not only meets Chinese standards but also satisfies international requirements. NI43-101、 JORC The requirements. JORC The report also includes a dedicated chapter on risk analysis for the project, covering risks such as those related to geological resources, mining risks, ore-processing risks, environmental and techno-economic risks, and infrastructure risks. Relatively little attention has been paid to this aspect domestically. Investors need to understand whether these risks are manageable, and whether they can be avoided or borne.

　　Additionally, in terms of environmental impact assessment, foreign countries require the use of the Equator Principles. Equator Principles ) and international financial organizations ( IFC The norms and standards of [subject] all need to be aligned with international standards.

　　3. Legal Policy Risks and Experience

　　When undertaking overseas mining projects, paying attention to the continuity of legal and policy frameworks is often more critical than securing certain preferential policies from governments or local communities. Government transitions can bring about significant changes, and since communities are often governed by personal relationships, they too tend to evolve over time. Therefore, it’s especially important for long-term exploration projects to closely monitor changes across successive administrations as well as longstanding operational practices over the years. In Africa, most countries were once British or French colonies; as a result, their political systems—including party structures, legal frameworks, separation of powers, judicial independence, freedom of the press, and multi-party systems—are relatively well-established. The frequent rotation of governments due to multi-party governance means that policies can differ dramatically from one administration to the next. Thus, it’s essential to build strong relationships with both the ruling party, opposition parties, local communities, and tribal groups. In addition to being mindful of legal and political institutions, it’s equally important to take into account local customs and established law enforcement practices. Only by adopting a comprehensive, holistic approach can one develop a truly robust political and legal strategy. Furthermore, it’s crucial to maintain a heightened awareness of potential risks, gather decades’ worth of data on investments made by other countries or companies in the same region, and draw upon past experiences and lessons learned—this will help achieve twice the results with half the effort.

　　4. Ways to Resolve Disputes

　　In Africa, it’s inevitable that you’ll encounter controversial issues, so it’s crucial to do thorough preparatory work and take proactive measures to mitigate risks. As a general principle, if you’re considering making investments in Africa, it’s best to purchase political risk insurance through the World Bank’s Multilateral Investment Guarantee Agency. MIGA There are various types of insurance available for commercial transactions, including export credit insurance offered by China’s Export-Import Credit Insurance Corporation, which provides corresponding coverage for overseas investments. Premium rates range from a few per thousand to several percent at most. Once political risks, community riots, wars, or civil unrest actually result in losses, most claims can be covered—including risks associated with sovereign defaults by state-owned enterprises and changes in environmental policies. Moreover, when disputes cannot be resolved through conventional means, it’s best to stipulate international arbitration and select reputable arbitration institutions, leveraging the authority of these bodies to exert pressure on the countries involved. Investors should take advantage of the multiple safeguard mechanisms available under current conditions to do everything possible to mitigate and prevent risks.

　　Middle Eastern and African countries are rich in mineral resources, with high-grade deposits and favorable geological conditions. However, their infrastructure remains relatively underdeveloped, while their political and policy environments are gradually stabilizing. Labor costs are low, and the primary languages spoken are French and local indigenous languages. These regions are home to a diverse array of ethnic groups and tribes, with widespread adherence to Catholicism, Christianity, and Islam. When undertaking mining investments in Middle Eastern and African countries, it is essential to leverage local resource endowments, conduct thorough due diligence, and align investment decisions with one’s own risk tolerance. In the event of legal disputes, it is advisable to seek resolution through reputable international arbitration institutions or by engaging in direct communication at the national level.

　　Currently, given the sluggish state of the mining market, countries in the Middle East and Africa have introduced preferential policies to stimulate mining development—for example, reducing taxes and fees and allowing the export of raw minerals—providing an excellent opportunity for Chinese-funded enterprises to pursue mergers and acquisitions. Recently, companies such as China Minmetals Geology, Zijin Mining, Sichuan Road & Bridge, and Luoyang Molybdenum have already begun proactively positioning themselves. We hope that through this sharing session, investors can leverage their own unique strengths and better “go global,” expanding and strengthening their businesses with a truly global perspective. □