Resource disputes between investors and states hit 10-year high

Resource disputes between governments and investors have reached a 10-year high, with 32 cases already lodged in 2025, surpassing last year's total, according to DLA Piper. This surge is driven by escalating resource nationalism and geopolitical competition for critical minerals vital for AI and electric vehicles, prompting states to exert greater control over deposits ranging from oil and gas to lithium. Key hotspots for these disputes include Latin America, notably Colombia and Mexico, and Africa, particularly the Democratic Republic of Congo, underscoring heightened political risk for global resource investments.

Analysis

Resource disputes between governments and investors have reached a 10-year high, with 32 cases already lodged in 2025 with the World Bank arbitration body, surpassing last year's total. This surge is primarily driven by escalating resource nationalism and intense geopolitical competition between the U.S. and China for critical minerals essential for AI and electric vehicles. States are increasingly asserting greater control over valuable deposits, from oil and gas to lithium.

Latin America accounts for the largest number of these disputes, with 11 cases, including Colombia's four, stemming from actions like designating natural reserves and banning fracking. Mexico, which nationalized lithium in 2022, also faces two cases. Africa is another significant hotspot with 10 disputes across countries like the Democratic Republic of Congo (DRC), where a dispute involving AVZ Minerals and KoBold Metals over a lithium project highlights the heightened risk.

The prevalence of these disputes, with 17 specifically related to oil and gas assets, underscores a significant increase in political risk for global resource investments. This trend reflects a broader shift where the perceived value of critical minerals is prompting states to exert greater sovereignty, impacting supply chains and investor confidence in emerging markets. The overall sentiment surrounding this development is strongly negative, indicating potential market disruption.

Key Decisions for Investors

• Investors should reassess political and regulatory risks in their resource portfolios, especially in emerging markets and regions with critical mineral deposits.
• Monitor geopolitical developments and nationalization policies closely, as these directly impact the security of resource investments and supply chain stability.
• Conduct thorough due diligence on legal frameworks and arbitration mechanisms before committing capital to projects in countries exhibiting high resource nationalism.
• Consider strategies like geographic diversification or hedging instruments to mitigate exposure to potential expropriation or adverse regulatory changes.