Resource nationalism is on the rise again. From Africa to Latin America to Central Asia, more governments are looking to toughen tax and other rules governing foreign-owned resource projects.
Both Chile and Peru recently elected leftist presidents seeking to raise taxes on the mining industry and block environmentally controversial projects. Rio Tinto was forced to renegotiate its deal with the Mongolian government to complete a giant copper project in the Gobi Desert. Last year, Kyrgyzstan seized control of a huge gold mine from the Canada’s Centerra Gold. Many other countries, from the Democratic Republic of Congo to Russia, are looking to toughen fiscal and other regulations facing the industry.
A range of factors — growing public debt due the pandemic, higher commodity prices, and stronger public environmental consciousness — are motivating politicians to target resource companies to extract more cash for state coffers and to win political points.