World’s top miners worry most about greater government control
Dow Jones reports resource nationalism is the top business risk for the top 30 global miners, while supply capacity constraints ranging from skills shortage to infrastructure bottlenecks continue to dominate the top ten list, according to an annual survey by consultants Ernst & Young.
Resource nationalism jumped to the top of the list this year from fourth in 2010 after 25 countries announced their intentions to increase their take of the mining industry’s profits and others contemplate outright nationalization.
Fraud, bribery and corruption sneaked onto the list of top concerns for the first time as a number of countries introduce or tighten rules for executives operating in countries that rank high on corruption indices.
Dow Jones quotes Mike Elliott, global leader of Ernst and Young’s mining and metals division, as saying: “Resource nationalism is taking other forms as well, including greater controls on foreign participation, mandated beneficiation, use it or lose it demand and mandated government participation.”
Fraud and corruption also surfaced from under the radar to become the tenth biggest business risk this year. The UK’s new bribery act implemented on July 2 places more liability on senior executives in fraud and corruption cases, which may make company executives think twice about investing in countries that are ranked high on corruption indices, Elliott said.