St. Gallen, Switzerland — 07 May 2012 – Mining companies will fight growing resource nationalism and could pull out of countries where governments are demanding too large a share of the pie, according to a warning from Swiss-based commodities giant Glencore International, in the wake of Argentina nationalising the country’s biggest oil firm.
Reuters quotes Glencore chief executive Ivan Glasenberg as saying that the mining industry is forming tight groups among each other on how they are going to fight it.
Speaking at a conference here, Glasenberg warned that 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 seeking shareholder backing for a US$37 billion takeover of Xstrata, warned that it would not hesitate to withdraw investments in places like Africa if governments changed the terms of existing contracts in their own 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 (DRC), Zambia and Equatorial Guinea.
Glasenberg also revealed that Xstrata, the FTSE 100 miner in which it has a share of almost 34%, was holding back on a big copper investment in Argentina.“That won’t happen for the moment,” he said.
Source: Reuters. For more information, click here.