It’s basic bargaining strategy. Threaten to walk away.
Behre Dolbear have just released their 2012 annual survey of Ranking of countries for mining investment. Australia, Canada, Chile, Brazil and Mexico are ranked in that order as the top five nations in which to locate mining projects> Australia was top in 2011 and also in 2010.
Glenn Dyer and Bernard Keane say at Crikey:
During the debate on the new mining and carbon taxes, we’ve had terms such as “sovereign risk” tossed about by people who don’t know what it means: not just the likes of Tony Abbot, but people who should know better, like Tom Albanese of Rio Tinto, any number of newspaper columnists and online chatterers (like Robert Gottliebsen at Business Spectator).
But all the while mining companies have continued to invest: groups such as BHP Billiton, Rio, Fortescue, and more: iron ore, coal, gold, copper, oil and gas, LNG. More than $300 billion worth of projects are planned or under way or on the table. And, despite that, we still get these strange comments about the threat to mining from this cast of know-alls (WA Premier Colin Barnett is the latest on 7.30 on ABC 1 last night: “for the first time in my career I’ve heard business people overseas, governments overseas, talk in terms of political risk and sovereign risk.”).
How did the countries nominated by Tony Abbott last year as better places for mining investment than Australia fare in the survey?
Zambia ranked 19th out of 25 (the three out of seven rating on tax didn’t help); Argentina 14th out of 25; Tanzania equal 12th; Ghana equal 9th; Botswana 8th.
It’s interesting that the introduction of Strategic Cropping Land legislation in Queensland is seen as a negative, being ‘government interference’.
This post has a summary of the findings in each of the seven categories.