Risk mapping for critical supply chains

1. Decision reviewed

The operating framework assesses whether an Africa-EU supply chain is usable, financeable and defensible. Physical availability of a mineral does not prove that the seller has title, that the origin is lawful, that quality complies with specification or that the goods can move through borders, banks and insurers without interruption.

The analysis applies to industrial operators, investors, banks, trading houses and institutions that need to reduce dependency, concentration and opacity in supply chains.

2. European context

EU Regulation 2024/1252 on critical raw materials sets 2030 benchmarks: at least 10% of the Union’s annual consumption from domestic extraction, 40% from domestic processing, 25% from recycling, and no more than 65% of annual consumption of each strategic raw material, at any relevant processing stage, sourced from a single third country.

These benchmarks are not targets for individual companies, but indicate the direction of European industrial policy. For buyers, geographic diversification, processing capacity, recyclability and proof of origin become relevant.

3. Chain of title and origin

Due diligence must reconstruct the path of the goods from mining rights to the delivered product. Each step must have a document, an accountable party and a control.

1. exploration or extraction licence, holder, duration, area and compliance with local law;
2. seller’s right to dispose of the goods and absence of pledges, claims or double sales;
3. volumes produced and purchased reconciled with mine capacity and transport records;
4. processing, blending, storage and possible contamination of origin;
5. registered exporter, permits, royalties, taxes and customs documents;
6. transfers of ownership along the chain and beneficial owners of the entities involved;
7. EU importer, customs classification, due-diligence obligations and industrial destination.

4. Quality, quantity and inspection

Assay and inspection are not formalities. They must be designed to prevent disputes over grade, moisture, impurities, weight and sampling.

• contract specification, tolerances, penalties, rejection and price-adjustment mechanism;
• representative sampling protocol, sealing, custody and retained sample;
• independent laboratory, analytical method and procedure in the event of divergent results;
• weighing at origin, port and destination with rules governing precedence;
• radiological, environmental or hazardous-substance controls where relevant;
• insurance aligned with value, route, theft risk and mode of transport.

5. Integrity, sanctions and rights

Controls must cover companies, individuals, vessel, bank, insurer, intermediaries, country of origin, transit countries and end user. The absence of a name from a sanctions list does not conclude the review.

• beneficial owner and possible nominees;
• politically exposed persons and relationships with granting authorities;
• EU, UN and other sanctions regimes applicable to the parties and banks involved;
• corruption risks, facilitation payments, commissions and consultancy arrangements lacking substance;
• armed conflict, security, child or forced labour, environmental violations and community rights;
• obligations under the EU conflict-minerals regulation for tin, tantalum, tungsten and gold, where applicable;
• alignment with the OECD guidance for responsible supply chains.

6. Logistics and continuity

Supply-chain risk often concentrates after purchase: road or rail, border, port, availability of containers or vessels, transshipment, insurance and dependence on a single infrastructure asset.

7. Payment, financing and control of the goods

• payment linked to documents proving title, origin, quality, quantity and shipment;
• escrow account or release mechanism where the chain of control requires it;
• prohibition on payments to unrelated third parties and enhanced verification of changes to bank details;
• refund or performance guarantees issued by acceptable parties;
• financing aligned with transfer of title and the ability to enforce against the goods;
• credit and political-risk insurance assessed before commitment;
• right to suspend where traceability, licence, cover or compliance is lost.

Early-warning indicators

• sudden changes in ownership, directors, bank or country of payment;
• offered volumes inconsistent with mining capacity or logistics data;
• unexplained discounts to market or a request for disproportionate advance payment;
• change of port, vessel, origin or exporter after signing;
• delay in licence renewal, community disputes or suspension of operations;
• documents with inconsistent numbering, dates, weights or descriptions;
• inability to access the site, laboratory or essential records;
• refusal to provide information on the beneficial owner or intermediaries.

Applied example: sourcing a critical material

A European buyer is considering a multi-year contract with an African producer. Before signing, the mining title, beneficial owner, origin of lots, production capacity, processing stages, export rights, logistics corridor, bank and final recipient are reconstructed and verified.

Publicly available checks

• reconciliation of stated reserves, historical production and contractual volumes;
• sampling, independent laboratory, tolerances and consequences of an off-spec assay;
• chain of custody, segregation, origin documents and control of intermediary parties;
• sanctions screening, anti-corruption, human rights and community impacts;
• alternative routes, insurance, stocks and suspension rights;
• payment conditional on verifiable evidence of title, quality, quantity and shipment.

Decision

Do not proceed if the economics of the transaction depend on titles, volumes, timelines or authorisations that the counterparty will not permit to be independently verified.

Indicative roadmap

Mandate framing, verification of essential information, qualification of counterparties and transaction structure, decision and implementation support. Sequencing, responsibilities and timelines are defined according to the scope agreed with the client.

8. Conditions requiring a no-go

Preliminary checks are intended to determine whether sufficient conditions exist to continue the transaction. If any of the circumstances below emerge, the review is suspended until the issue has been fully clarified. If the issue cannot be resolved or adequately mitigated, Sentinel recommends not proceeding.

• mining title, ownership of the goods or export rights cannot be verified;
• origin, lot or chain of custody is interrupted or documentary evidence is inconsistent;
• beneficial owner, intermediaries, vessel, bank or final recipient are not identified;
• sanctions, conflict, corruption or rights-related risk cannot be mitigated;
• assay without controlled sampling or an independent laboratory;
• payment requested before evidence of title, quality, quantity and authorisations;
• absence of insurance or inability to finance the goods on sustainable terms;
• dependence on a single corridor without stock, alternative route or contractual suspension right;
• transaction economics sustainable only by assuming unproven prices, yields or timelines.

Non-public content

Analytical matrices, parties reviewed, operating sources, documentary checks, FX scenarios, payment structures, blocking conditions and engagement methods are not published. They are prepared exclusively in relation to a qualified need and the specific scope of the mandate.