Sunday, 03 Jul 2011
Reuters cited Ms Cynthia Carroll CEO of Anglo American as saying that governments in mineral rich countries must steer clear of the blind alleys of nationalization and excessive tax if they want to attract continued investment from global miners.
Speaking at an industry dinner, Ms Carroll called on the industry to speak out over issues that risk hobbling development for producer countries and for the sector. She said governments tempted to move in this direction convince themselves that necessary mining investments in their countries will continue unabated, despite the imposition of such arbitrary changes."
She added that "They are wrong. International businesses have choices to make between investment opportunities in different jurisdictions. She also said miners would be attracted instead to countries with stable and fair fiscal regimes.”
Ms Carroll said nationalization of mining assets was also unlikely to foster development. Empowerment policies have badly damaged Zimbabwe mining industry and have created uncertainty in South Africa, Anglo main market where nationalization is backed by some in the ruling ANC but officially condemned.
She said "I say it again and I urge all of you to join me in saying it nationalization does not work."
Resource nationalism in producer countries whether it is the urge to demand a larger share of mineral wealth through company ownership or through taxes has become a growing problem for the industry as governments face tight budgets in the aftermath of the financial crisis, while commodity prices boom.
(Sourced from Reuters)
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