The Central African Republic (CAR) – one of the world’s poorest and most fragile countries – holds vast mineral wealth that, if fully harnessed, could transform its economy. It boasts substantial deposits of diamonds, gold, uranium, copper, iron ore, manganese, limestone, kaolin and graphite. Additionally, valuable minerals such as monazite, rutile, tin, quartz and kyanite underline the country's untapped potential. 

Furthermore, lifting the Kimberley Process embargo on diamonds on 15 November 2024 and allowing exports from all regions could provide a vital boost to the nation's economy.

Despite these mineral riches, insecurity – driven by armed militias and the activities of the Wagner Group, a Russian private military company in crucial mining regions – continues to disrupt operations, deter investment, and prevent the country from fully realising the benefits of its resources.

The CAR spans 623,000 sq km in the heart of Africa, bordered by Chad to the north, Sudan and South Sudan to the east, the Democratic Republic of Congo and the Republic of Congo to the south and Cameroon to the west. It is part of the Congo Basin, the world’s second-largest rainforest, with its southern regions dominated by dense forest and its northern regions characterised by expansive savannahs.

Geologically, it is mainly underpinned by Precambrian rocks rich in mineral deposits. Around 60% of the surface area – more than 400,000 sq km – holds significant mineral potential, with over 470 identified mineral occurrences spread across its territory. However, a large proportion of the terrain has not been adequately surveyed.

Diamonds are the foundation of the country's mining sector. They are mainly concentrated in the southwestern and central regions, including Berberati, Carnot and Nola, where alluvial deposits are common.

In 2023, the CAR exported 107,857 carats of diamonds worth $12.27mn – a significant decline from 2011, when diamond exports totalled 323,575 carats, valued at $61.4mn, with over 80% classified as jewellery-grade. The drop reflects insecurity and disruptions in the mining industry following the 2013 civil conflict. Before the conflict, diamonds represented 40% of exports, but by 2023, their share had dropped to just 11%.

Exports from Kimberley Process-compliant zones in the country have resumed in stages, paving the way for more secure and sustainable diamond production. The Kimberley Process ensures that diamonds are sourced without funding conflict or contributing to violence. It approved limited exports in July 2015, allowing diamonds from compliant zones such as Berberati to re-enter the market. By September 2016, additional zones, including Boda, Carnot and Nola, were officially designated as compliant, enabling exports under the certification scheme. 

These efforts culminated in November 2024, when the Kimberley Process lifted its embargo on CAR’s diamonds, permitting exports from all regions of the country. This progress offers a vital economic stimulus, supporting the livelihoods of 150,000 to 300,000 artisanal miners.

Gold is another critical resource – with significant deposits in CAR's eastern and central regions – particularly in the Ndassima area. The government has estimated the value of the Ndassima gold deposit to be $2.8bn. AXMIN, a Canadian gold exploration company, initially operated the Ndassima gold mine in the Ouaka Prefecture in the country's central region until it was seized during the civil war in 2013. 

In 2019, the government revoked AXMIN's licence and, the following year, awarded it to Midas Ressources, a company affiliated with the Wagner. 

Although industrial mining remains limited, artisanal and small-scale mining (ASM) associated with gold continues to thrive, especially in Haute-Kotto in the country's eastern part and Mambéré-Kadéï in the southwest. Smaller deposits, such as those at Bogoin in the southwest, contain an estimated one tonne (or 32,000 ounces) of gold at 6 grams per tonne, which remains largely untapped. 

Furthermore, with notable deposits in Bakouma in the country's southeast, uranium is one of the most promising unexploited resources. The Bakouma deposit – evaluated by AREVA (now Orano), the French multinational company – is estimated to contain over 50,000 tonnes of uranium.

Iron ore is another crucial mineral, with the Topa deposit in the country's central part estimated to hold more than 500mn tonnes at a 66.7% iron content across 25 square km. Meanwhile, the Bogoin iron ore deposit is estimated to contain 3.5mn tonnes with an iron grade of 60–65%. 

Lignite reserves at N’zako in the country's southeast are estimated at 33,000 cubic metres. The Bobassa limestone deposit, located 20 km southwest of Bangui, the nation's capital, contains 10mn tonnes with 92% carbonate content. Graphite deposits at Marago-Manga in the country's central region are estimated at 300,000 mn tonnes with a carbon content of 13.25%.

The Ngadé copper deposit in the country's north has a grade of 5.72%. Cobalt, chrome, nickel, colombo-tantalite, zirconium, kaolinite, laterite, quartzite, and granite occurrences further diversify the mineral endowment. Additionally, energy resources such as thorium and hydrocarbons are present, potentially offering future opportunities for the energy sector.

Despite these vast resources, the mining sector remains predominantly artisanal, with industrial operations severely underdeveloped. The Ndassima mine is the only industrialised site in the country. The CAR only touches the surface of its mining potential. 

Moreover, the country has endured over two decades of political turmoil, with the 2013 seizure of power by the Séléka marking a critical turning point. The Séléka, a coalition of predominantly Muslim rebel groups, overthrew President François Bozizé, who had been in office since 2003. Their rise to power intensified sectarian tensions between the Muslim Séléka and the Christian anti-Balaka militias, leading to widespread violence and a devastating civil conflict.

The latest crisis erupted in December 2020, instigated by the Coalition of Patriots for Change (CPC), a coalition of various armed factions, including former Séléka members. The CPC sought to topple President Faustin-Archange Touadéra's government, which has led the country since 2016 and remains in office.

Stabilisation efforts have focused on the Political Agreement for Peace and Reconciliation, signed on 6 February 2019 between the government and 14 armed groups. While some CPC-affiliated groups withdrew from the agreement in late 2020, it continues to serve as a critical framework for peace. The Luanda Roadmap, facilitated by the International Conference on the Great Lakes Region, has supported the disarmament, demobilisation, reintegration and resettlement of CPC combatants. The disbandment of nine of the 14 signatory armed groups in 2023 provides renewed hope for stability.

The Wagner's presence has compounded the country's security issues. Since 2017, when initially invited by President Touadéra to combat rebel forces, it has provided security assistance while exploiting the country's natural resources, particularly gold and diamonds. Yet, it has been accused of human rights abuses and atrocities.

In 2019, Wagner began expanding its control over gold mines, initially focusing on central and eastern regions before advancing north. Violence escalated after it took charge of the Ndassima mine, clashing with local rebel groups and targeting artisanal miners. Survivors reported brutal incidents, including a 2021 attack in which eight miners were killed after refusing to vacate the area.

This pattern of displacement and violence has repeated across the country. In October 2022, the Wagner paramilitaries allegedly executed 12 civilians in Koki while seizing a gold mine. Earlier, in January 2022, heavily armed mercenaries attacked Aigbado and Yanga villages, killing 70 people. Similar violence in the Andaha region in March 2022 left over 100 miners dead as the Wagner tightened its control over resource-rich areas.

In 2023, the US Treasury sanctioned Midas for financing the Wagner's activities. Following the death of the Wagner founder, Yevgeny Prigozhin, in 2023, control of the mines shifted to the Russian Ministry of Defence under the Africa Corps structure. In September 2024, Midas representatives threatened local miners with "consequences" if they did not vacate new mining areas. Russia continues to have significant influence over the mining sector.

Furthermore, Rwanda has played a vital role in the country since 2013, contributing troops to MINUSCA, the UN peacekeeping mission. During the December 2020 electoral crisis sparked by the CPC rebellion, Kigali deployed nearly 1,000 additional forces through a bilateral agreement to support President Touadéra's government. 

Rwandan troops have bolstered security, repelled insurgents and guarded Rwandan business interests, including gold and diamond mines. This dual role, mixing security assistance with economic ventures, has raised concerns among Central Africans about its economic influence and potential clashes with other foreign actors, such as the Wagner. 

Moreover, in August 2023, the country adopted a new constitution, removing presidential term limits and extending the presidential term from five to seven years. This change allows President Touadéra to seek a third term. The first local elections since 1986 are scheduled for 2025.

The International Monetary Fund forecasts that the CAR economy will grow by 1.44% in 2024 and 2.94% in 2025. At current prices, the country's GDP is estimated at only $2.82bn in 2024. The GDP is projected to increase slightly per capita from $529.49 in 2024 to $548.83 in 2025. Inflation is expected to remain steady, with consumer prices rising by 4.651% in 2024. Meanwhile, the country's general government gross debt is forecast to decrease as a percentage of GDP from 57.379% in 2024 to 55.433% in 2025.

The country's population is estimated at 5.33mn people in 2024, and the capital, Bangui, has around 1mn inhabitants. 

As of 2017, the mining sector contributed around 7% to the country's GDP. More up-to-date data is not available. 

Furthermore, the World Bank reports that the economy has stagnated since 2023, partly due to a 13% decrease in reported gold production during the first half of 2024, likely linked to increased smuggling in conflict areas. 

Yet, the stagnation is mainly due to delays in the Ubangi River transport campaign, which typically supplies 80-85% of the country's fuel imports. By the end of August 2024, this vital transport had yet to begin, causing severe fuel shortages, disrupting trade and production, and triggering frequent power outages in Greater Bangui. 

Fuel shortages, which have been ongoing for three years, continue to severely disrupt local trade and production. Although limited fuel reserves and the black market can prevent a short-term collapse, the situation remains highly concerning.

Nonetheless, the government has actively sought to attract foreign investment into the mining sector. In 2024, it enacted Law No. 24-008, an updated Mining Code designed to create a more investor-friendly environment. This legislation provides a comprehensive legal framework for mineral resource exploration, exploitation, processing, and marketing. The revised code addresses ambiguities in previous laws, ensuring greater clarity and stability for investors while incorporating international best practices.

Recognising the importance of ASM to the national economy, the reforms aim to formalise artisanal mining activities. This includes registering miners, cooperatives, and purchasing offices and introducing licensing systems to integrate ASM into the formal economy. The government hopes to reduce illegal mining and increase tax revenues.

The country's Ministry of Mines and Geology has been tasked with implementing and monitoring mining activities under the new framework. Efforts have been made to improve the ministry’s capacity to oversee compliance, streamline licensing procedures and reduce bureaucratic inefficiencies.

Mining companies are subject to various taxes and royalties, calculated based on the value of extracted minerals. Royalties are set at 3% for gold and 2% for base metals, with periodic adjustments. Corporate income tax is charged at a standard rate of 30%, though incentives under the Mining Code could apply.

Surface fees, determined annually based on permit area, are higher for industrial operations than for small-scale activities. A value-added tax of 19% applies to goods and services, including imports, with potential exemptions to attract investment. A withholding tax of 15% is levied on payments to non-resident service providers, while customs duties on imported equipment may also qualify for reductions.

Companies must also pay environmental taxes, contributing to rehabilitation funds based on impact assessments. 

However, foreign mining operations – particularly Chinese – have faced significant security challenges recently. 

On 27 November 2024, unidentified gunmen ambushed and killed six motorcycle taxi drivers and four passengers near Bria, a vital diamond mining town in the country's eastern part. The victims were returning from a religious ceremony in Ippy to Bria, the capital of Haute-Kotto prefecture when they were intercepted. According to a local official, the attackers tied up the victims, executed them, and set their motorcycles on fire.

On 12 May 2024, armed rebels attacked a Chinese-operated gold mine in Gaga, 200 kilometres from Bangui, killing four people and injuring several. Authorities blamed the CPC, a rebel alliance linked to former President François Bozizé. These incidents highlight the severe risks Chinese companies face in CAR's unstable mining sector.

Furthermore, on 19 March 2023, gunmen attacked the Chimbolo gold mine near Bambari, killing nine Chinese workers and injuring two. The assailants struck early in the morning, overpowering guards before opening fire. This came shortly after the kidnapping of three Chinese nationals near the Cameroon border earlier that month.

In June 2024, the government suspended the operations of Daqing, a Chinese gold and diamond mining company, over allegations of collaborating with armed rebel groups, illegal exploitation and tax evasion. The company operated in Mingala, a conflict-affected area in the country's south, where the CPC rebel group is active. 

This suspension highlights the complex challenges foreign mining companies face in the CAR, where security concerns and allegations of illicit activities complicate the exploitation of mineral wealth. While the government attempts to improve the regulatory framework, the prevailing security issues and the involvement of foreign military groups present substantial obstacles. 

In addition, the mining sector faces numerous other challenges that hinder its potential. Poor infrastructure, a lack of skilled labour, weak governance and environmental concerns are obstacles. 

Inadequate transport networks limit access to mining sites and raise costs for moving minerals to markets. The country relies on Cameroon's Port of Douala for mineral exports, primarily using the Douala-Bangui Corridor. This key route, comprising trunk roads linking Bangui to Cameroon, suffers from poor maintenance and frequent security threats, including attacks by armed groups and bandits. 

Frequent power outages and insufficient electricity supply disrupt operations and deter investment in processing facilities.

A lack of skilled labour further restricts growth. Artisanal mining dominates, with little formal training available, while industrial operations struggle due to a shortage of engineers and technicians. Brain drain exacerbates the issue as skilled workers seek better opportunities abroad.

Weak governance, outdated laws, and corruption create an unpredictable business environment, discouraging investment and long-term economic development. Licensing processes often lack transparency, favouring short-term gains over long-term growth. In the 2023 Corruption Perceptions Index by Transparency International, the CAR scored 24 out of 100, ranking 149th out of 180 countries worldwide.

Financial constraints also weigh heavily on the sector. Limited foreign investment and high costs for imported equipment leave many ventures underfunded. Environmental and social issues add complexity, with unregulated artisanal mining causing deforestation and pollution, while displaced communities often resist mining activities due to inadequate compensation.

The sector's reliance on raw mineral exports further limits its potential. The country has made little effort to develop downstream industries like refining and manufacturing. 

Despite its immense mineral wealth, the development of the country's mining sector remains out of reach. Armed militias, attacks on foreign miners and widespread insecurity have created a hostile environment that deters investment, along with poor infrastructure and regulatory inconsistencies. The Kimberley Process's lifting of the diamond export embargo is a vital first step, but these challenges must be addressed before the Central African Republic can unlock its full mining potential.