300b<\/span> for 2011<\/li>\n<\/ul>\n\n\tIn 2011, Resource nationalism became the number one risk for mining companies.
\n\tMiners are an easy target as mining is a long term investment and one that is especially capital intensive – mines are also immobile, so miners are at the mercy of the countries in which they operate. Outright seizure of assets happens using the twin excuses of historical injustice and environmental\/contractual misdeeds. There is no compensation offered and no recourse.<\/p>\n
\n\t“Resource nationalism is taking other forms as well, including greater controls on foreign participation, mandated beneficiation<\/span>, use it or lose it demands and mandated government <\/em><\/p>\n\n\t“We know it’s tempting, at a time when government debt is mounting and metal prices are rising, for some governments to try to grab an even higher proportion of the revenue from mining. But we urge governments to remember that the cumulative effect of these unreasonable tax hikes will be to push up world prices and slow global <\/em>gap.”<\/span> And it’s going to get worse – the oldest baby boomers are turning 65 years old in 2011 – and the global mining industry is experiencing the biggest wave of workforce retirements in 70 years.<\/p>\n\n\tIn the next five years one-third of the mining workforce will be eligible for retirement. According to the Mining Industry Human Resources (MiHR<\/span>) Council’s latest labor market information report, “Canadian Mining Industry Employment and Hiring Forecasts 2010” the mining industry will need approximately 100,000 new workers by 2020.<\/p>\n\n\tAs if the mining sector didn’t already have enough to worry about.<\/p>\n
\n\tMine production of many metals is showing a number of similarities:<\/p>\n
\n- \n\t\tSlowing production and dwindling reserves at many of the world’s largest mines<\/li>\n
- \n\t\tThe pace of new elephant-sized discoveries has decreased in the mining industry<\/li>\n
- \n\t\tAll the oz’s or pounds are never recovered from a mine – they simply becomes too expensive to recover<\/li>\n<\/ul>\n
\n\tIncreasingly we will see falling average grades being mined, mines becoming deeper, more remote and come with increased political and nationalization risk. Extraction of metals from the mined ore will become increasingly more complex and expensive, even more so when one considers the effects of Peak Oil – the cost of technology innovation to power mining will be very high.<\/p>\n
\n\tBroad spectrum peak commodities is a cause for concern over the longer term.
\n\tIn the shorter to medium term there are several serious concerns in regards to global resource extraction that we need to consider:<\/p>\n
\n- \n\t\tResource nationalism<\/li>\n
- \n\t\tCountry risk<\/li>\n
- \n\t\tA looming skills shortage<\/li>\n<\/ul>\n
\n\tJunior resource companies with fully staffed, secure projects in safe, stable countries should be on every investors radar screen. Are they on yours?<\/p>\n
\n\tIf not, maybe they should be.<\/p>\n
\n\tRichard (Rick) Mills?
\n\trick@aheadoftheherd.com<\/span>?
\n\twww.aheadoftheherd.com<\/span><\/p>\n\n\tThe views and opinions expressed are the author's, not FNArena<\/span>'s.<\/p>\n\n\tFind out why FNArena<\/span> subscribers like the service so much: "Your Feedback (Thank You)<\/a>" – Warning this story contains unashamedly positive feedback on the service provided.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"Ahead of the Herd’s Rick Mills discusses two major risks facing the mining sector globally.<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5],"tags":[23,89,24,88,22],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/58752"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=58752"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/58752\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=58752"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=58752"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=58752"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}