Algeria lifts mining foreign ownership cap

Algeria has removed the 49% foreign ownership cap in the mining sector, a move that could reshape the country’s extractive industries. The change, announced in June 2025 and detailed by the International Comparative Legal Guides (ICLG), allows foreign investors to hold majority stakes—or even full ownership—in mining projects for the first time since the 2000s. The reform applies to all minerals, including gold, iron, phosphate, and rare earths, but excludes hydrocarbons, which remain under the control of state-owned SONATRACH.

The decision aligns with Algeria’s broader push to diversify its economy beyond oil and gas. Mining currently contributes less than 1% to Algeria’s GDP, despite the country’s estimated $1.5 trillion in untapped mineral reserves, according to the Ministry of Energy and Mines. The government has identified 1,200 mining sites, but only 150 are currently operational, most of them small-scale. The new rules aim to attract foreign capital and expertise to develop large-scale projects, particularly in remote southern regions like Tamanrasset and Adrar.

For foreign investors, the reform removes a long-standing barrier. Under the previous 51-49 rule, Algerian partners—often state-linked entities—had to hold majority control, complicating joint ventures. Now, companies can structure deals without local majority ownership, though the government retains the right to approve all mining licenses. The Ministry of Energy and Mines has also pledged to streamline permitting, with a target of reducing approval times from 18 months to six.

The change comes as Algeria seeks to position itself as a regional mining hub. In May 2026, officials from Uzbekistan visited Algiers to discuss cooperation in geological exploration, signaling interest from Central Asian investors. Algeria’s state mining company, ORGM, has also signed preliminary agreements with Canadian and Australian firms to explore lithium and cobalt deposits, critical for electric vehicle batteries.

Local entrepreneurs, however, face a mixed outlook. While the reform could spur demand for Algerian subcontractors—such as drilling, logistics, and engineering firms—it also raises concerns about competition. Small and medium-sized Algerian mining companies, which dominate the sector, may struggle to compete with larger foreign players. The government has not yet announced support measures for domestic firms, though the 2025 Finance Law includes tax incentives for local suppliers working with foreign mining projects.

The reform also reflects Algeria’s broader economic strategy under President Abdelmadjid Tebboune. Since 2020, the government has introduced a series of measures to attract foreign investment, including a new investment law in 2022 and tax breaks for sectors like renewable energy and manufacturing. The mining sector, however, had remained largely untouched until now. According to Credendo, a European credit insurer, Algeria’s macroeconomic outlook remains constrained by its dependence on hydrocarbons, which account for 90% of export revenues. The government hopes mining can help reduce this reliance, with a target of increasing the sector’s GDP contribution to 5% by 2030.

For the Algerian diaspora, the reform presents an opportunity to invest in a sector with high growth potential. Many Algerians abroad, particularly in France and Canada, have experience in mining and geology. The government has encouraged diaspora investment through initiatives like the 2023 “Return and Invest” program, which offers tax exemptions and simplified procedures for Algerians living abroad. The mining sector could now become a focal point for these efforts, especially as global demand for critical minerals rises.

Key takeaway for entrepreneurs
Algeria’s removal of the foreign ownership cap in mining opens the door for international investors, but local businesses must prepare for increased competition. Entrepreneurs in related sectors—such as logistics, equipment supply, and environmental services—should explore partnerships with foreign firms entering the market. The diaspora, particularly those with mining expertise, may find new opportunities to invest in or advise Algerian projects, especially in critical minerals like lithium and cobalt.