Rinehart’s Hancock weighs $3.3 billion iron ore mine project
Hancock acquired a 51% interest in the Mt Bevan project from Legacy Iron Ore Ltd. and Hawthorn Resources.
Gold proved today that it’s far from dead and stock indices around the world were lifted by commodities, but government taxes and worker union demands are creating major obstacles to the sector’s renewed health.
Gold Fields’ CEO Nick Holland claims while the euro zone crisis and gold sell-offs “are partly to blame,” government’s sticky fingers, resource nationalism and ongoing labour unrest are testing the quickly thinning patience of investors, Kevin Crowley reported for Bloomberg.
“Equity investors are frustrated…we’ve spent a lot of their money and given them very little back for it. They keep reminding us of that,” said Holland during a speech in Johannesburg.
Governments in Brazil, Canada, Australia, Namibia and Zimbabwe have all sought a larger share of mining sector profits in recent years, to name a few. Tanzania and Namibia are exploring “super-profit taxes” and mine nationalization is gaining political ground in South Africa as labour, government and the miners do battle to get their hands on the diminishing profits.
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2 Comments
Peter
Article sounds like the usual nonsense though. On Resource Nationalism, all those governments involved have specifically requested Companies to SELL a certain percentage to locals i.e. give the locals a chance to invest and profit from their natural resources. Once they buy in, they become SHAREHOLDERS!!! JUST LIKE ANY OTHER BASED OUTSIDE OF THE PARTICULAR COMPANY. So how exactly does this scare off international investors!!!!!! Local communities around the mine sites DO DEFINITELY NEED A PIECE OF THE PIE FOR OBVIOUS REASONS AMONG THEM THE DISTURBANCE, NOISE/DUST POLLUTION ETC. ALL COMPANIES TALK ABOUT SOCIAL CORPORATE RESPONSIBILITY BUT HAVE YOU EVER VISITED PLACES LIKE GEITA GOLD MINE (TANZANIA), THE PEOPLE ARE STILL LIVING IN SHACKS FROM WHICH THEY COMMUTE TO WORK DAILY!!!!! SHARE THE PIE AROUND A BIT, YOU HAVE HAD IT TOO NICE FOR TOO LONG IS THE PROBLEM
Apple
Peter
Part of the problem is that mining companies pay taxes and royalties to federal or state government and this does not trickle down to local benefit. And if the federal or state governments are
given or buy a stake in the operation the profits from this stake do not trickle down to the local economy. Large mines worldwide often pay taxes to the federal and state governments than are obliged to take on the role of these governments by providing schools health care and infrastructure.
Your proposal is asking companies to pay twice, their federal and state obligations then give ownership to local communities. I think most mining companies would prefer to see their tax and royalty payments stay in the mining region rather than be spent a bureaucracy in a Capital city.
In your Geita gold mine example, perhaps the people should ask more from the taxes and royalties paid to federal and state
governments. This problem is not limited to Tanzania, in Canada taxes are paid to Toronto, Quebec City or Vancouver and
Ottawa, but most of the dollars do not reach the mining communities.