Archive | Resource Nationalism

Indonesia’s long relationship with Freeport at crossroads – by Staff (Asian Corrospondent – March 16, 2017)

https://asiancorrespondent.com/

AMERICAN mining giant Freeport-McRoRan Copper & Gold may soon pull out of Indonesia after more than four decades due to prolonged conflict with the government. The company, which is the country’s oldest international investor and largest taxpayer, has been embroiled in a battle with President Joko “Jokowi” Widodo’s administration over new national mining regulation.

Legislation introduced in January 2017 requires Freeport to convert its business contract into a special mining licence, dictating the company must divest 51 percent of shares in its local subsidiary within a decade and build a new US$2 billion smelter.

With economic nationalism a key aspect of Jokowi’s agenda, the government is also demanding higher royalties, land relinquishments and more materials to be procured from local suppliers. Continue Reading →

Study of 10 resource-rich countries show export taxes offer virtually no benefits: OECD – by Sunny Freeman (Financial Post – March 9, 2017)

http://business.financialpost.com/

Export restrictions and local content quotas in the mining sector are more likely to hamper than spark economic growth in developing countries, according to the Organization for Economic Co-operation and Development.

Jane Korinek, economist and trade policy analyst at the OECD presented findings from a study of 10 resource rich countries with various levels of export regulations, from outright bans on exports such as in Indonesia, to export quotas in place in countries like China, and export taxes as seen in Russia and Argentina.

“There was virtually no benefit and in some cases there were negative impacts,” on economic growth, Korinek said on a panel Wednesday, the final day of the Prospectors and Developers Association of Canada convention. Continue Reading →

Indonesia evaluating mining rules as 2017 deadline on metal exports nears – by Wilda Asmarini (Reuters U.S. – September 8, 2016)

http://www.reuters.com/

JAKARTA – Indonesia’s mining ministry is scrambling to find a way around a deadline on mineral processing that could prevent some miners, including U.S. copper mining giant Freeport-McMoRan Inc, from exporting minerals from the country from 2017.

Under a government regulation introduced in 2014, miners of copper, zinc, lead, manganese and iron are restricted to exporting partially processed minerals until January 2017, after which only shipments of refined metals will be allowed.

The export curbs – which have cost Indonesia billions of dollars in lost revenue – were intended to shift sales from unprocessed raw materials to higher-value finished metals, but smelters have been slow to materialise as low commodity prices have made them economically unviable. Continue Reading →

Chinese Takeovers Trigger Global Backlash Ahead of G-20 Summit – by Rich Miller (Washington Post/Bloomberg – August 26, 2016)

https://www.washingtonpost.com/

(Bloomberg) — Forget about Yankee go home. Now it’s Chinese go home.

From Australia blocking a bid for a power network to the U.K.’s review of a proposed Chinese-funded nuclear plant, opposition to China’s outward push is opening a thornier and potentially more treacherous front in the country’s economic tug-of-war with the rest of the world. And it’s coming as China prepares to host a Sept. 4-5 summit of Group of 20 leaders.

Unlike festering frictions over trade, the new front is in an area — investment — where the global rules of engagement are more amorphous and where national security interests are more prominent. That raises the risk of a rapid escalation of tensions that can’t be so easily contained.

“The implicit accusation when rejecting overseas direct investment is much stronger than trade,” said James Laurenceson, deputy director of the Australia-China Relations Institute at the University of Technology in Sydney. Continue Reading →

Kazakhstan: Privatization Versus Control – by Eimear O’Casey and Alexander Batchilo (Forbes Magazine – July 28, 2016)

http://www.forbes.com/

LONDON — Like oil and gas exporters across the globe, Kazakhstan has been hit hard by the sharp drop in global hydrocarbon prices since late 2014. Exports are down, budget revenues have been squeezed, and the Central Bank was forced to carry out a de-facto devaluation in August 2015 that rendered the Kazakh tenge the world’s most volatile currency last year.

In response, the government has emphatically embarked on an anti-crisis plan. At its center is a major privatization drive, announced in January. In total, 65 state-owned companies and 175 of their subsidiaries are to be transferred partially or entirely to the private sector via a combination of negotiations, auctions and initial public offerings (IPOs) by 2020.

Among the biggest prizes on offer are stakes of up to 25% in the state oil and gas company KazMunaiGaz, national airline Air Astana, state railways Temir Zholy and holdings in the nuclear, mining and electricity sectors. The government is strongly encouraging foreign companies to bid for these. Continue Reading →

[Philippines] Duterte urged to nationalize mining – by Thom F. Picana (The Manila Times – May 17, 2016)

http://www.manilatimes.net/

BAGUIO CITY: Environmentalists and indigenous people in Northern Luzon are pushing presumptive President Rodrigo Duterte to nationalize the mining industry “that prioritizes people over profit.”

Amianan Salakniban (Defend The North), through spokesperson Igorot leader Fernando Mangili, said Duterte could also work for the junking of the Philippine Mining Act of 1995 that severely affected the environment and the people for over two decades.

Indigenous peoples in the North believe that, “Land is Life… Nobody can own what can outlive us,” hence, “it is our responsibility to the future generations that they can still breathe the same fresh air we breathe today.” Continue Reading →

Thousands Rally in Mongolia Over Foreign Mining Concessions (New York Times – March 30, 2016)

http://www.nytimes.com/

The Associated Press – ULAANBAATAR, Mongolia — A rare public protest in Mongolia’s capital on Wednesday drew thousands of demonstrators who criticized foreign mining concessions and demanded action to prop up the tottering economy.

More than 2,000 demonstrators in Ulaanbaatar’s Freedom Square also called for parliament to be dissolved and a new government formed over alleged corruption and the economic crisis battering the vast, landlocked nation.

Protesters say the mineral wealth that accounts for 94 percent of the nation’s exports has been exploited by foreign companies, with few benefits going to Mongolia’s 3 million people, one-third of whom live in poverty. Continue Reading →

Is Africa’s ‘resource nationalism’ just big business as usual? – by John Childs (The Conversation U.S. Pilot – May 14, 2015)

http://theconversation.com/us

Big mining firms in the Democratic Republic of Congo are worried. For the past decade they’ve made good money from the country’s huge reserves of cobalt, diamonds, gold and copper, and now the government wants to grab more of the action: a document leaked to Bloomberg reveals plans to raise royalties and profit taxes, and increase the state’s share in any new ventures.

This is so-called “resource nationalism” in action, and the DRC is far from alone in seeking greater economic control of its natural resources. The state is back, the theory goes, and it’s taking on the multinational. From Scotland to Namibia, Zambia to Ecuador, resource rich nations throughout the world are rhetorically reclaiming gas, oil and minerals as their own.

The trend is widely reported as the enemy of trade, investment and energy security alike. In the UK, for example, the Telegraph called it a “spectre” and government economists have labelled it as both a “threat” and “anti-competitive”.

On the other side of the coin, governments argue they are simply ensuring foreign businesses don’t unfairly benefit from resource extraction. Take Zambia, for instance. The landlocked African nation is a major copper exporter yet most of the population still lives below the poverty line. After the government looked to crack down on tax avoidance by multinational mining firms, one senior politician defended the move: “The situation is win on one side – only the shareholders are winning; the people of Zambia are still in abject poverty”. Continue Reading →