African Commodity Due Diligence Handbook
This handbook is the comprehensive reference we use on every engagement. It covers the full due diligence lifecycle — from initial client consultation through to final report delivery — with practical guidance for each stage. It is written for institutional buyers, financiers, and procurement teams who need to understand what rigorous due diligence looks like in African commodity markets.
1. The purpose of due diligence in African commodity transactions
Due diligence in African commodity transactions is not a box-ticking exercise. It is the process by which a buyer or financier moves from a counterparty's claims to independently verified facts before capital is committed. The purpose is to reduce commercial, operational, and compliance risk to a level the commissioning party can accept.
In markets where information is asymmetric, where remote buyers rely on documents they cannot easily verify, and where fraud patterns are well-established, structured due diligence is the single most effective risk control available. The cost of a due diligence engagement is a fraction of the capital at risk in even a modest commodity transaction.
2. The five pillars of commodity due diligence
Our framework rests on five pillars, each addressing a distinct category of risk. No single pillar is sufficient on its own — the value is in the combination.
The five pillars:
- Entity verification — confirming the supplier legally exists and is who they claim to be
- Document authentication — verifying every material document against the issuing authority
- Chain-of-custody verification — tracing the commodity from source to export with evidence
- Physical inspection — confirming on-ground reality through site visits and sampling oversight
- Risk assessment — consolidating findings into a decision-ready report with recommendations
3. Entity verification in practice
Entity verification begins with the company registry. Confirm the registered legal name, registration number, status, registered address, directors, and beneficial owners where disclosable. In many African countries, online registry tools exist; where they do not, a local representative can verify in person.
Beyond the registry, verify that the entity is licensed to carry out the specific activity it claims — mining, trading, exporting. A company can be legally registered and still lack the authority to export commodities. Licensing is separate from registration and is the document most commonly forged or borrowed.
4. Document authentication methodology
Document authentication is not about reading documents — it is about checking them against the issuing authority and against each other. Every material document should be verified against the authority that issued it: mining licences against the mining ministry, export permits against the export authority, certificates of origin against the chamber of commerce or relevant body.
The second layer of authentication is cross-referencing. A fraudulent document set usually contains at least one internal inconsistency — entity names spelt differently, weights that do not match, dates that are impossible. Cross-checking catches forgeries that look plausible in isolation.
Documents to authenticate:
- Mining licences — against the mining authority
- Export licences — against the export authority
- ICGLR certificates — against the ICGLR registry
- Certificates of origin — against the issuing body
- Assay reports — against the laboratory and for consistency with the material
- Customs documentation — against the customs authority
- Bills of lading — against the named carrier
- Warehouse receipts — against the warehouse operator
5. Chain-of-custody verification
Chain of custody is the evidenced record of who held the commodity at every point from source to export. It is the connective tissue between the mine and the transaction — and it is where most fraud hides. A supplier can be registered, licensed, and documented, and still be unable to account for how the commodity reached them.
The verification approach is to ask for a step-by-step account of the custody path, with supporting evidence at each transfer. A credible account is specific — naming entities, locations, dates, and transfer points. A vague account is a red flag that warrants on-ground verification.
6. Physical inspection and site visits
Documents tell you what a supplier claims. A site visit tells you what is actually there. Where the transaction justifies it, an independent on-ground visit confirms that the supplier operates where they say they do, has the capacity they claim, and holds material consistent with the offer.
Site visits also expose staged operations. Some fraudsters rent a warehouse and stock it with material for the duration of a buyer's visit. A trained analyst looks for signs of a real operating presence — not a showroom set up for one meeting.
7. The due diligence report
Every engagement should end with a decision-ready report. The report consolidates entity checks, document authentication, custody assessment, site findings, and inspection results into a clear risk picture — with a recommendation to proceed, renegotiate, or walk away.
The report is the document your compliance team, your bank, and your investment committee will want to see. It is also the document that protects you if the transaction later goes wrong. A professional report is evidence-based, with findings, risk ratings, supporting documentation, and photographic evidence where applicable.
Due diligence in African commodity transactions is a structured, multi-layered process. No single check is sufficient — the value is in the combination of entity verification, document authentication, chain-of-custody, physical inspection, and consolidated risk assessment.