natural resources

When a country cuts power to its aluminium smelters so its people can watch the World Cup on TV, you have to conclude that its economic policy isn’t all about investing for the future.

Ghana this week called in the International Monetary Fund after a depreciation in its currency threatened to turn into a rout. The episode is an excellent illustration of the injunction to be careful what you wish for, in this case Ghana’s discovery of oil. Its fellow minerals exporter, copper-rich Zambia, has also called in the IMF.

The two nations have become object lessons in how easy outside financing and high but volatile export prices give countries enough rope to strangle themselves. Their experience is unlikely to be a bad as similar countries in previous decades, but it still represents another chapter in the sad history of resource-dependent economies going wrong. Read more

By Richard Dobbs and Fraser Thompson of the McKinsey Global Institute

By 2030, nearly half of the world’s economies could be resource rich countries. It is vital for the future economic prospects of these countries – and to satisfy the world’s need for their resources – that they do better than many have done in the past in translating their sub-soil wealth into long-term prosperity. Read more

No-one likes a large tax bill, especially in arrears.

London-listed Randgold and Mali’s government are heading for international arbitration at the International Center for Settlement of Investment Disputes over a disagreement over around $60m in tax connected to Randgold’s Loulo gold mine. Read more

When it comes to natural resources in Africa, coverage tends to focus on the problematic (see Rio in Mozambique), the awkward relationships (see China), the political risk (see Congo) and the collapse in labour relations (see South Africa).

But despite the setbacks, Africa still has vast untapped reserves and lots of potential. So what should investors look out for in the next few years? Research from Ecobank has identified six themes. Read more

On Friday, India’s cabinet approved the creation of an independent regulator for the coal industry and announced that the Coal Regulatory Authority Bill 2013 will now be put before Parliament.

So far, all as expected. So why have shares in Coal India jumped over 7 per cent? Read more

Kenya may have avoided the dreaded ‘resource curse’ afflicting many of its African peers, but that leaves the government with painful revenue-raising choices, such as the controversial recent attempt to raise taxes on mobile money transfers.

But the country might not be as resource-barren as it once seemed. Read more

By Bernice Lee of Chatham House

Resource insecurity is back with a vengeance. It is time for world leaders to respond to burgeoning demand from emerging economies, which has driven up commodity prices and made them more volatile, and led to supply disruptions, environmental degradation and political tensions.

Governments have mostly reacted with unilateral – and often myopic – policies, alongside vague attempts at collaboration. This is not enough. The world’s top resource-producing and resource-consuming nations should establish a Resources 30 (R30) Group, and cooperate in managing global natural resources. Read more

Resource nationalism isn’t just the expropriation of major companies or industries, like YPF in Argentina – it also takes subtler forms. James Smither, associate director at risk consultancy Maplecroft, explains to Rob Minto how shifts in commodity prices can undermine a country’s resource leverage and the more nuanced ways revenue can be retained within domestic borders.

Sierra Leone pre elections

Photo: Tamika D. Payne

Investors typically take a wait-and-see approach to elections in Africa. And things are no different in Sierre Leone, which holds a presidential poll on Saturday, in its third election since its civil war.

There’s a lot at stake for the small West African nation looking to move beyond its bloody past – and for the energy and mining companies eyeing its natural resources. Read more

Between now and 2030, China will be adding as much new power capacity as the US, UK, and Australia combined use today, according to calculations from HSBC. That is a lot of power.

But there is a catch: Generating electricity requires water, and Chinese supplies are increasingly running short. Whether it is water used to cool nuclear power stations, in coal-washing, steam turbines, or solar panel factories – everything that generates electricity needs water at some stage. Read more

South Africa on Friday lifted a 2011 ban on shale gas exploration in its semi-arid Karoo region, allowing oil majors resume the scramble for exploration licences.

The country’s estimated 485tn cubic feet of technically-recoverable shale gas resources are the fifth largest in the world, placing it just behind China, which has 1,275tn cubic feet, the US, Argentina and Mexico. Read more

By Oleg Deripaska

For centuries Russia has walked in step with Europe. Our country and its citizens have been at the centre of the continent’s history. It is our biggest trade and foreign investment partner. But while Russia is rightly proud of its place in Europe, this focus has left our eastern regions underdeveloped. We need to put this right if we are to develop the full potential of Siberia for the benefit of the country and of the rest of the world. Read more

China’s Yancoal seems ready to get its estimated A$2bn takeover bid for Australia’s Gloucester Coal in before Christmas. Trading in Gloucester was suspended on Thursday as the boards of both companies were reportedly due to meet later in the day or on Friday.

Gloucester said  in a public statement seeking the suspension of its shares that it was not yet in a position to make an announcement. But investors expect that it soon will be. Read more