Algeria’s mineral wealth gives it a new edge

The country has passed a new minerals law seen by its backers as a catalyst for investment. But critics say it surrenders sovereignty. Which way will the pendulum swing?

Alamy

A worker mining lead sulphide in the border area between Morocco and Algeria.

Algeria’s mineral wealth gives it a new edge

Rabia Abdul Salam

last update on 04 Sep 2025

What lies beneath the ground in Algeria has long been of interest economically, but for decades, all anyone thought about was oil and gas. Lately, however, there has been interest in the country’s other subterranean assets, the mining of which is soon expected to be a key driver of economic diversification.

Since taking office in 2019, Algerian President Abdelmadjid Tebboune has prioritised this sector, harbouring ambitious hopes. But a controversial new minerals law has divided opinion, with some fearing a reversion to a rentier economic model. Supporters see it as a catalyst for investment, while critics say it surrenders sovereignty.

How Algeria reconciles economic openness with the protection of its natural resources is now a key question, given its vast potential resources and growing external interest.

Subterranean riches

One of the first big discoveries was in 2015, when—with Japanese help—selenium was found in parts of the city of Sig in western Algeria. Selenium is in high demand due to its use in the electronics industry, photovoltaic solar panels, and pharmaceuticals.

A further key element found in Algeria is lithium, which is used to make lithium-ion batteries for electric vehicles (EVs) and mobile phones. Algerian Energy Minister Mohamed Arkab is among those to see great potential in this field, noting its presence in the country’s south, where he said there were “ideal geological characteristics for mineral extraction”.

Another big mining focus is Algeria’s phosphate reserves, which are estimated at around 2.2 billion tonnes, among the largest in the world (although dwarfed by neighbouring Morocco’s 50 billion tonnes). Most of Algeria’s phosphates are concentrated in the country’s north-east.

Al Majalla

Bled El-Hadba mine, south of Tebessa province, is one of the most important phosphate development projects. With an estimated investment of around $7bn, it is hoped that the mine will establish Algeria as a leading producer and exporter of fertilisers once completed.

Likewise, the Ghar Djebilet iron ore mine in south-western Algeria is one of the largest in the world, with reserves of 3.5 billion tonnes. It officially opened in July 2022, and annual revenues are expected to eventually reach around $10bn.

Helium is another important resource in Algeria’s mineral portfolio. According to some estimates, the country holds the world’s second-largest reserves after the United States, amounting to 1,800 million cubic metres. These reserves are concentrated in the Hassi R’mel region of the Algerian desert.

Widespread concern

With ongoing efforts to leverage Algeria’s mineral resources, concerns have been expressed by academics, economists, researchers, and politicians that the minerals sector could become a new rentier economy i.e. one in which a significant portion of income is derived from the ownership of assets like land, natural resources, or financial capital, rather than from productive activities like manufacturing or services.

This has been seen with Algeria’s oil and gas over the past two decades, leading to excessive dependence on hydrocarbons (around 90% of Algeria’s exports are hydrocarbons, and this accounts for almost half of government income).

Supporters see the new law as a catalyst for investment, while critics say it surrenders sovereignty

Economist Suleiman Nasser told Al Majalla: "Minerals are similar to oil and gas. What we fear today is the repetition of the rentier policy. What we hope for is to eliminate the rentier constraint and diversify the economy by relying on small and medium-sized enterprises and start-ups, as well as developing agriculture and industry."

The growing debate has intensified with the recent approval by the Algerian parliament of new incentive-based legislation aimed at attracting foreign investors. Previously, the state had owned 51% of enterprises in strategic sectors, but this new law caps state ownership at 20%, meaning foreign investors can own up to 80%. Opposition parties have called it a "surrender of national wealth".

The government is under pressure from the likes of the International Monetary Fund to seek other income streams and attract more private capital. Ministers defend the law as "enhancing national sovereignty over natural resources," but opposition MPs have said the new law "hands the keys to our mineral wealth to international companies at a time when geo-economic competition over vital minerals is intensifying".

Other concerns relate to building Algerian talent and knowledge in the minerals sector and whether foreign ownership would mean foreign skilled workers performing the major tasks, or whether Algerian engineers and geologists would gain valuable skills.

The leftist Workers' Party called the law "a step towards the abolition of mineral nationalisation and an open invitation for foreign companies to control the country's underground wealth". She said it "clearly retreats from the gains achieved through the national movement and sector workers' struggles, from the nationalisation of minerals in 1966… to their re-nationalisation in 2014, following a painful period of privatisation and foreign exploitation".

Eric Lafforgue / Getty Images — An Algerian man working with metal in a workshop in the Casbah, North Africa, Algiers, Algeria, on December 25, 2022, in Algiers, Algeria.

Supporters note that only a small number of mining firms are involved in exploration and extraction, as investment in this sector requires long-term contracts due to the time-consuming nature of prospecting and the need for advanced technology. They also argue that the 51% state ownership rule (stemming from 2009) is now outdated and would deter foreign investment.

Minister of Energy, Mines, and Renewable Energy Mohamed Arkab said the goal was to strike a balance between attracting investment and safeguarding national interests, adding that "the Algerian state retains the right to regulate and control mining activities through laws and specifications that impose strict environmental and local development obligations on investors".

Arzeki Zerrouki, who formerly worked at the National Office of Geological and Mining Research (ORGM), supports this view, arguing that the sector required massive investment that carried a high degree of commercial risk.

He added that adequate tools already existed to protect national interests, such as the 'right of pre-emption,' which governs foreign investment during the liquidation phase, allowing the state to both prevent the sale of assets and to exercise a right to buy them. The principle of state control over the minerals sector, therefore, remains intact, he said, despite the changed context.

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