Why licensing matters
Rising global demand for critical minerals has increased interest in exploration and mining rights across Africa. That interest can bring investment, but it also raises the stakes of every licensing decision. When procedures are unclear or highly discretionary, licences can be allocated to applicants without the capacity to develop them, held speculatively, transferred without proper scrutiny or influenced by undisclosed interests.
The consequences extend beyond individual decisions: lost revenue, delayed development, disputes with investors and communities, and erosion of public confidence in the sector.
Common vulnerabilities
- Broad discretion without published criteria. When legislation leaves key decisions to officials without clear, published criteria, outcomes become difficult to predict and to defend.
- Fragmented responsibility. Applications may pass through several institutions — the mining cadastre, the ministry, the environmental authority and others — with unclear sequencing and unclear accountability for the final decision.
- Weak due diligence on applicants. Limited verification of technical and financial capacity, and of the ultimate owners behind an applicant, creates room for speculative holding and conflicts of interest.
- Unscrutinized transfers and changes of control. Licences can change hands indirectly through sales of shares in holding companies, sometimes without regulatory approval or payment of applicable taxes.
- Poor records and limited disclosure. Incomplete or inaccessible licensing records make it difficult for regulators, oversight bodies and the public to see who holds which rights, and on what terms.
- Undeclared conflicts of interest. Where officials involved in licensing decisions have undeclared interests, the integrity of the entire system is compromised.
Integrity by design: practical measures
- Clear, published criteria and procedures for each type of licence, including timelines and the institution responsible for each step
- Structured discretion: where judgment is required, documented reasons and review by more than one official
- Applicant due diligence covering technical and financial capacity, compliance history and beneficial ownership
- Approval requirements for direct and indirect transfers and changes of control
- Conflict-of-interest declarations and recusal rules for officials involved in licensing decisions
- A reliable licence register and cadastre, with public access to core information
- Internal review and external oversight, including by audit institutions and parliamentary committees
- Clear grounds and due-process safeguards for suspension and revocation
International reference points
Governments can draw on established international standards. The EITI Standard requires implementing countries to disclose how licences are allocated and transferred, to maintain publicly accessible licence registers, to disclose beneficial-ownership information and to publish all contracts and licences granted or amended from 1 January 2021. The OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas offers a further reference for reducing risk in mineral supply chains.
These standards are most effective when they are built into national law and day-to-day administrative practice, rather than treated as periodic reporting exercises.
The role of technology
Digital cadastres and case-management systems can make licensing more consistent, traceable and transparent — recording each step, flagging overdue decisions and keeping a reliable history of every licence. Technology supports integrity, but it does not replace clear rules, accountable decision-makers and effective oversight.
How AABSA can help
AABSA reviews licensing laws, procedures and institutional arrangements, assesses integrity risks and supports governments in designing reforms that are legally sound, transparent and capable of consistent administration.
This brief is provided for general information. It does not constitute legal advice on any specific matter.