Somaliland needs independent geological evidence, competitive licensing, community protections and transparent contracts before opening critical-mineral deposits to foreign investors.
Somaliland risks negotiating away mineral wealth before it knows precisely what lies beneath the ground.
President Irro has promoted lithium and other minerals to potential Israeli and American investors. But geological indications are not the same as commercially recoverable reserves. Before approving major concessions, Somaliland needs independent surveys, transparent licensing and rules that protect communities from environmental and economic damage.
Establish what exists first
Somaliland’s government says the territory contains lithium and other valuable deposits. Reuters reported that Saudi mining company Kilomass received an exploration licence in 2024. Exploration, however, does not establish the size, quality or profitability of a deposit.
The government should publish geological data and require companies to report findings under a recognised international reporting standard. Investors should not be allowed to market speculative deposits as proven national wealth.
Create a public licensing system
Somaliland’s Ministry of Energy and Minerals already issues exploration licences, including to foreign companies, generally for periods of up to three years. Its policy commits the government to responsible and sustainable mineral development.
That framework should be strengthened through:
- competitive bidding for valuable areas;
- a searchable licence register;
- publication of contract owners and beneficiaries;
- disclosure of fees, royalties and tax concessions;
- deadlines for exploration and development;
- automatic cancellation of dormant licences.
Companies should not be permitted to accumulate territory merely to resell licences later.
Protect communities and public revenue
Mining can consume water, displace pastoral routes and leave pollution long after investors depart. Environmental and social assessments must therefore precede extraction, not follow it.
Affected communities need consultation, compensation, grievance procedures and a defined share of local benefits. Companies should post rehabilitation bonds so taxpayers do not inherit abandoned pits or contaminated water.
Somaliland also needs a stable fiscal system combining royalties, corporate taxes and community-development contributions. Special exemptions negotiated secretly can leave the country carrying environmental risks while investors export most of the value.
Keep politics away from licensing
Ministers should set policy but not personally select beneficiaries. An independent mining regulator should evaluate technical and financial qualifications, while Parliament reviews agreements involving exceptional tax treatment, strategic deposits or significant public obligations.
WARYATV assessment
Critical minerals could give Somaliland new diplomatic and economic leverage. They could also become a source of elite competition, land disputes and public mistrust.
The correct sequence is straightforward: map the resources, establish the rules, invite competition and then negotiate. Somaliland should never exchange unvalued mineral rights for political goodwill.
Recognition can create access to investors. Only credible regulation can ensure those investors build national wealth.
