A rising tide of resource nationalism is causing miners to rethink where they invest and creating volatility for a sector already buffeted by brewing trade wars.
“A significant industry issue is resource nationalism,” Rio Tinto Group Chief Executive Officer Jean-Sebastien Jacques told investors at a conference in Miami this week. “From the DRC and South Africa to Mongolia and Australia, it is gaining momentum. As a result, the case for investment and FDI is clearly under threat.”
Among the most epic battles is Freeport-McMoRan Inc.’s fight to secure long-term rights to its flagship Grasberg copper-and-gold mine in Indonesia. Its joint venture partner, Rio Tinto, is in talks to extricate itself by selling its stake to local interests.
The tide is particularly strong across Africa, where a long list of miners are negotiating with politicians threatening to upend long-standing agreements in order to reap greater economic rewards from local resources.
In the last week, shares of Kinross Gold Corp. were slammed by news that governments in Mauritania and Ghana were considering changing the rules.
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