Monday, June 19, 2006

Resource nationalism may impact mining - World Bank

A fresh rise in resource nationalism seen in some parts of the world could have an unfavourable impact on the mining industry, a World Bank official said on Thursday.

Peter van der Veen, manager of the World Bank's mining policy division, said that while there had been successful examples of state ownership there were also cases where nationalisation had not worked.

Speaking at a seminar in Tokyo, van der Veen said: "Overall, especially in mining, I would say governments have not proven to be very responsible and good ... owners and operators of mines."

Van der Veen said that Chile's Codelco, the world's top copper producer, was one of the cases where state-ownership had proved successful.

But, he noted that Zambia's efforts to nationalise its copper operation had led to a steep decline in production. Annual copper output at one point fell below 300 000 tons from a peak at 700 000 tons in the 1970s.

Zambia sold the country's key copper mines to the private sector in 2000. Copper production has now recovered to about 500 000 tons, van der Veen said.

Some South American countries have recently moved to nationalise their resources spurred by the recent rise in global commodities prices and the wish for a greater share in the profits.

"Governments feel there is an opportunity, to indeed get a better share of the cake," van der Veen said. -source

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