Mineral Laundering & Militias: Tracing Beneficial Ownership Behind Critical Mineral Transactions

Alexander Bagnull, J.M. Lindstrom

With the anticipated increase in demand for critical minerals to enable energy and digital transition, governments are increasingly turning to government-to-government (G2G) deals and partnership frameworks to diversify supply chains and secure access to critical raw materials. One of which is the United States government, which has signed at least 20 bilateral frameworks, memoranda of understanding (MOUs) and resource-backed financing agreements to secure access to critical minerals since January 2025.1

From April 2025 the US-Ukraine Reconstruction Investment Fund agreement covered lithium, titanium and other rare earths,2 then December 2025 Strategic Partnership Agreement with the Democratic Republic of the Congo;3 a May 2025 Memorandum of Cooperation with Saudi Arabia on uranium, permanent magnets and general metals,4 as well as an additional ten MOUs signed at the February 2026 Critical Minerals Ministerial with countries from Guinea, Morocco, Peru, Uzbekistan and the Philippines.5 On August 20th, 2026, the government also signed a policy under the US Department of Energy to subsidize $500 million for secure critical minerals for US policy and security.6

Governments of resource-rich countries are also responsible for granting licenses, contracts, concessions and other agreements for the exploration and exploitation of minerals. A single jurisdiction may have several types of licenses and contracts for mining that it grants to companies. These typically include fiscal terms and social and environmental commitments, including provisions for local content, duration, and terms for decommissioning. While this briefing focuses on oil, gas and mineral resources, it should be noted that jurisdictions may adopt similar licensing processes for a range of sectors whose governance has relevance to the energy transition and natural resource management more broadly. Examples of them include forestry and fisheries as well as renewables infrastructure, such as the construction of wind farms. The real owners of extractive companies and projects related to G2G deals, known as the beneficial owners, are often kept anonymous or hidden from public view by a chain of shell companies.7 This can be a particular challenge in the extractive industries, where knowing who has the rights to extract oil, gas and minerals is key to addressing risks of corruption or conflict of interest.

The trend of entering security deals in exchange for access to minerals may be treated as matters of national security that could involve exemptions in international trade or investment frameworks, limiting disclosure or oversight. These could raise concerns over the types of investors engaged in deals financed by defense departments. Concealed ownership often exposes entities to severe anti-money laundering (AML) and sanctions compliance risks. Thorough ownership analysis requires cross-checking identified names against global lists of Politically Exposed Persons (PEPs), beneficial ownership screening tools, and watchlists to ensure the supply chain remains free of corruption and legally compliant.8

The 20 deals aforementioned mark where risk holds within the system itself, however, not from external pressures. In June and December of 2025 the US brokered the Washington Accords for Peace and Prosperity between the DRC and Rwanda, as well as a US-DRC Strategic Partnership Agreement, granting American corporations influence and preferential access to Congolese cobalt, copper and lithium;9 something long desired by US corporations to compete with the expansive Chinese influence in the DRC. Such a partnership was stated under the agreement of Regional Economic Integration; traceable, transparent and entirely legal and positive forms of extraction. The methods and origins of metals all ethically sourced, a defiant strike the DRC has been working toward for some time in an attempt to establish a more legitimate and credible system of extraction. Chinese infrastructure in the region has continued without regard to such policies, however such an agreement marks a direct development in this common goal of US expansion into the DRC's mines to contest China and the DRC's desire to expand in an ethical, responsible way. Rwanda by contrast has seen an export explosion of roughly 370% between 2017 and 2024, from $373 million to $1.75 billion,10 largely as a result of Congolese-origin material relabeled as Rwandan on export.11 The supply chain reaches up to advanced weaponry and technology such as microchips and radar, and down to the extraction in mines; as such, to control one end or another is to take the greatest leverage and profit. China acts as an intermediary through its power over processing. However, the contention in central Africa is still rooted in the extraction process. June 2026 saw the US Treasury's Office of Foreign Assets Control sanction the Gasabo Gold Refinery Ltd, as well as its chairman Jean Malic Kalima, and three other Rwandan mining companies, as a result of laundering critical minerals out of the DRC and smuggling them into Rwanda by the M23 militia.12 In February 2025 the Treasury had already sanctioned James Kabarebe for coordinating such smuggling operations and managing the revenue of the sold DRC minerals on M23's behalf.13 Kabarebe has held the post of Rwanda's Minister of State for Regional Integration since before the February 2025 sanctions, and used that position to manage the resource-laundering network the December 2025 Accords later formalized market access around.14

Such a policy has a clear cause and effect, then: a government scaffolding is being established upon an already-revealed laundering process. Government sanctioning and policy sit atop a system of smuggling and exporting under false pretenses by a Rwandan militia to sponsor that very militia. It is a lucrative business and one which supports itself cyclically. The US sanctions provided some pressure, but nonetheless the value of the resources leads only to export by other nations who do not abide by such sanctions; China, for example, does not suffer from such sanctions and is able to purchase resources which are not otherwise internationally sold. Bluntly said, China benefits by gaining discounted resources the US is unable to attain. China does not formally enforce or police unilateral United States sanctions, as Beijing views such American measures as illegitimate under international law. However, Chinese state interests regarding conflict minerals smuggled from the Democratic Republic of the Congo through Rwanda involve a complex diplomatic and economic balancing act rather than outright defiance. China firstly rejects the Western sanctions as an overreach internationally, as well as implementing its own legal frameworks to order domestic entities to ignore certain US sanctions on mineral trade. Lastly, China does not actively cooperate with or implement U.S. Treasury (OFAC) designations aimed at regional supply chains or foreign entities unless mandated by the United Nations Security Council.15

The issue lies, therefore, not with the operators or corporate registered entities but instead with the beneficial ownership itself. The concealment mechanism is not a shell company that obfuscates the owner of the mine but instead the national export-certification system, which is meant to create transparency between exports and international ethical trade, to encourage compliance with sanctions, laws, and ethical sourcing standards. The origin of minerals and those who profit from their sale becomes inherently problematic due to the obscuring, not of corporations which can be sanctioned, but of entire nations which export smuggled goods. Plainly stated, a refinery can hold a clean legal title to gold under Rwandan law, all the while the underlying mineral and the revenue generated by its sale can be traced back to an armed militia under active US sanction. The legal owner of the exporting entity and the actual beneficiary of the value chain are two separate results of the same function, so no beneficial ownership registry can be confirmed on the refinery itself, because ownership was not the problematic point in the system.

This also raises concern regarding the national-security exemptions, as Human Rights Watch described the Accords as a "mineral deal first," as opposed to a treaty with the notion of resolution and peace.16 Rwanda's international role in resource laundering is formalized by the Accords in that they permit the export role of Rwanda to become a diplomatically endorsed role. Additionally, legal memos note that the agreements were negotiated with minimal congressional visibility into the ownership and revenue-sharing policies of the resource laundering. The US objective itself is not illegitimate, as it seeks to establish peace between combating nations in a volatile region, as well as aiding US national security in terms of mineral deals. Nonetheless, the actual execution of the Accords establishes a formal role for Rwanda's money laundering under little oversight. The Treasury and State Department present new sanctions to display that the transparency commitment is being enforced as promised, despite the fact that the notion of a "transparent, traceable supply chain" so internationally desired is muddied by the incorporation of resource laundering.

Put simply, because the resource laundering is permitted due to negotiations between interested parties in Rwanda and the DRC, the result is a system designed to be traceable but directly limited by the fact of resource laundering, which is protected by the very system meant to halt it. Chinese partners currently control 68% of Sicomines, the largest mining venture in the DRC, per resource-backed finance arrangements.17 The US model, however, meant to displace disproportionate Chinese influence, fails on account of the money laundering built into the system. If the US design does not truly contest Sicomines in terms of transparency, as it set out to, it will have replaced one problem of concealment with another.

In a simple order of operations, the US attempts to increase transparency in the DRC and resolve conflict with Rwanda through the Accords; the negotiations of the Accords, however, granted Rwanda a formal role in resource laundering per negotiations which lacked oversight. The result is a problem crystallized: despite US sanctions on the resource-laundering powers in Rwanda, the very system harms the transparency the Accords set out to create.

State-directed opacity is not incidental to how critical mineral supply chains are being built; rather, it serves as a recurring design in supply chains, with a variance in success. The role of transparency and traceability in the resources that are being used to build nations has risen as a key to critical

mineral international importance. Nonetheless, friction is ever-present in such a system, as is reflected in other articles in this volume, and such a pattern tells a story that incidents alone do not. The greater impact lies in where and how a resource is attained, surpassing simply the critical nature of it.

Notes & References