Glencore CEO Ivan Glasenberg told a conference in Switzerland that mining companies will fight resource nationalism by pulling out of countries where they feel demands are too onerous.
ST GALLEN, Switzerland (Reuters) – Mining companies will fight growing resource nationalism and could pull out of countries where governments are demanding too large a share of the pie, commodities giant Glencore warned on Friday, a day after Argentina nationalised the country’s biggest oil firm.
“The mining industry is forming tight groups among each other on how we are going to fight it…,” Glencore Chief Executive Ivan Glasenberg said.
Glasenberg, speaking at a conference in the Swiss town of St Gallen, warned there would be consequences to producer countries seeking an ever larger share of mining profits, a trend which has risen alongside commodity prices as the main mining constituencies raise taxes and royalties.
Glasenberg, whose company is in the throes of a tie-up with miner Xstrata, warned Glencore would not hesitate to withdraw investments in places like Africa if governments change the terms of existing contracts in their favour.
“African states are going to have to be very careful because there are minerals all over Africa and if they start this nationalism or if they start taking a bigger profit, we will go elsewhere,” he said.
Glencore, the world’s largest diversified commodities trader, operates across Africa, with key production assets on the continent in South Africa, the Democratic Republic of Congo, Zambia and Equatorial Guinea.
Glasenberg also said Xstrata, the FTSE 100 miner in which it has a share of almost 34 percent, was holding back on the big copper investment in Argentina.
“That won’t happen for the moment,” Glasenberg said at a conference session on emerging market risks.
Argentina’s Congress voted on Thursday to nationalise YPF, seizing a majority stake from Spain’s Repsol. The move has drawn swift reprisal from Spain and has prompted warnings that Argentina risks scaring off much-needed foreign investment.
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