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Report: The Top 10 Business Risks for Mining and Metals

The biggest business risk for global miners is from resource nationalism. When the governments around the globe decide that they want to keep the profits of the blooming mining industry to themselves it is the multinationals who will suffer the most as per a new report from financial institution Ernst & Young, ‘Business risks facing mining and metals 2011–2012’.

Mike Elliott, Ernst & Young’s Sydney-based sector leader for global mining said that over the past 15 to 16 months, resources nationalism has really bitten. Almost everywhere you look there’s an increase in what governments take he said. More than 25 countries in the last year either changed, or announced potential changes to, their fiscal arrangements around mining as per Mike Elliot.

The report said that is has likely happened due to the resilience of the mining industry. Because the mining and metals sector rebounded quickly from the global financial crisis, it became an early target to help restore treasury conditions as per the Ernst & Young report.

Companies are having to respond to changes in attitude to the roles that companies need to play, demonstrated through what they need to contribute financially and what level of community contribution a mining company is expected to undertake as per Mike Elliot.

Andy Miller, global tax leader for mining and metals for Ernst & Young, said in the report that resource nationalism had become a contagion impacting the mining and metals industry across the globe. The tight labor markets also provide an environment for greater industrial disputes as organized labor seek to increase wages he said. A lack of sufficient rail networks appears to be the largest global bottleneck.

Joel Scanlon

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Joel Scanlon

Joel emigrated to Australia in 1995 and worked for five years in the mining industry as an exploration geotechnician, using GIS mapping and CAD software. Upon moving to the North Coast of NSW, Australia Joel worked as a graphic designer for a leading consultancy firm. After that, he ran a successful business providing web services to businesses along the eastern seaboard of Australia. During this time, he developed and launched News-Medical.Net. Joel has been working with AZoNetwork since the company was founded in 2000.

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