Lessons Somaliland Can Learn From Other Emerging Mining Economies

Somaliland’s mining sector is still in its formative stages. Over the past decade, activity has increased steadily, but the industry remains largely artisanal, fragmented, and informal. Commercial mining is limited to a small number of operations, most of them small-scale, with typical outputs of less than 15 tonnes per day. This profile places Somaliland firmly among a group of emerging mining economies that are rich in potential but constrained by structure, capacity, and institutional maturity.

Looking outward, there are valuable lessons to be drawn from countries that have travelled a similar path—from informality toward regulated, industrial mining—without assuming that models can be copied wholesale.

Start With Reality, Not Ambition

A common mistake in nascent mining jurisdictions is attempting to regulate an industry that does not yet exist in practice. Several emerging mining economies initially focused on drafting sophisticated mining laws aimed at large-scale investors, while the reality on the ground remained overwhelmingly artisanal.

Successful transitions elsewhere began by acknowledging that artisanal mining is not a temporary anomaly, but the dominant mode of production in early-stage sectors. Countries that recognized this reality early were better positioned to manage growth, reduce conflict, and gradually formalize activity.

Somaliland today faces a similar situation: regulations exist primarily for commercial and industrial mining, while artisanal mining operates almost entirely outside formal oversight. This gap is not unusual—but it must be addressed deliberately.

Formalization Is a Process, Not an Event

Case studies from other emerging mining economies show that formalization works best when it is gradual. Attempts to immediately suppress or criminalize artisanal mining often led to instability, illicit trade, and enforcement challenges that exceeded state capacity.

More effective approaches focused on:

• Creating transitional frameworks for small-scale miners

• Encouraging safer practices without heavy-handed enforcement

• Introducing incentives rather than penalties

The lesson for Somaliland is clear: regulation must evolve in parallel with capacity, not ahead of it.

Processing Infrastructure Changes the Equation

One of the most consistent patterns across emerging mining jurisdictions is the catalytic role of local processing infrastructure. Where governments or private investors supported the development of centralized processing facilities, several positive outcomes followed:

• Reduced unsafe chemical use

• Improved gold recovery

• Increased transparency and traceability

• Higher incomes captured closer to the source

Processing plants often became the bridge between artisanal activity and formal markets. In Somaliland, where output remains small and dispersed, processing infrastructure may prove more transformative than upstream regulation alone.

Community and Customary Authority Matter More Than Paper Law

Another key lesson is that formal mining laws are only as effective as their alignment with local social structures. In many emerging economies, mining areas are governed as much by customary authority as by statutory institutions. Ignoring this reality led to project delays, security incidents, and prolonged disputes.

Jurisdictions that achieved stability invested heavily in community engagement, worked through traditional leadership, and treated social license as a prerequisite—not an afterthought. Somaliland’s strong clan and pastoral systems make this lesson particularly relevant.

Institutional Capacity Must Grow With the Industry

Emerging mining economies that progressed sustainably invested early in institutional capacity, even before large-scale mining materialized. This included:

• Training regulators and inspectors

• Establishing basic data collection systems

• Clarifying licensing and enforcement roles

Somaliland’s regulatory framework for commercial and industrial mining is a starting point, but without parallel capacity-building, enforcement gaps will persist—especially in the artisanal space.

Avoiding Overreach Is a Strategic Advantage

Perhaps the most important lesson is restraint. Countries that avoided overregulation in the early stages preserved flexibility and investor confidence. They allowed the sector to grow organically while gradually introducing structure where it was most needed.

For Somaliland, the objective should not be to rush toward a fully mature mining regime, but to sequence development intelligently—starting with safety, market access, and community stability.

A Path Forward Grounded in Experience

Somaliland’s mining industry does not need to reinvent itself overnight. Its current stage mirrors that of many successful mining economies at an earlier point in their development. By learning from these experiences—without overreach or unrealistic ambition—the country can build a sector that is safer, more transparent, and better positioned for long-term growth.

The challenge ahead is not whether Somaliland can develop a mining industry, but whether it can do so at the pace and scale its institutions and communities can sustain.