Political and geopolitical risk
Expropriation risk: what it is and how to manage it
Expropriation risk is the risk a government seizes or nationalizes a foreign investment. Recent Sahel cases, warning signs and protection options.
Guide
Political and geopolitical riskLast updated
3 minute read
By Zed Three analysts
Short answer
Expropriation risk is the risk that a host government seizes, nationalizes or effectively takes away the value of a foreign company's investment, with or without fair compensation. It is highest in extractive industries and in countries where governments are under fiscal pressure or seeking nationalist support, as recent Sahel mining cases show.
Last updated
Recent cases
Mali seized Barrick's Loulo-Gounkoto gold complex before a settlement in November 2025 that required about US$430 million. Burkina Faso transferred five gold assets to its state miner in 2025, and Niger took control of Orano's Somair uranium mine and later handed its permit to a state company.
Warning signs
New mining or investment codes raising state stakes, tax claims against a single foreign operator, export bans on product, detention of local staff, and political rhetoric about sovereignty over resources.
Protection options
Structure investments to benefit from bilateral investment treaties and international arbitration, buy political risk insurance with expropriation cover, keep strong local partners and community ties, and set triggers for reducing exposure early.
What happens next?
We assess it is likely that at least one more Sahel government takes a new step against a foreign mining operator within 6 months.
Likelihood ranges are Zed Three editorial judgments as of Nov 2, 2026, not advice.
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Frequently asked questions
Is expropriation legal?
International law generally allows it for a public purpose, without discrimination and with prompt, adequate compensation. Disputes usually turn on compensation.
What is indirect or creeping expropriation?
Measures that do not formally transfer ownership but destroy the investment's value, such as license cancellations or punitive taxes.
Can expropriation be insured?
Yes, through political risk insurance from private insurers or agencies such as MIGA.
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