Resource Nationalism And Its Impact On Infrastructure Projects

Introduction

The global demand for natural resources continues unabated. As revenues increase and profits soar in the face of this demand, there has been a resurgence of "resource nationalism" with resource-rich host states seeking greater control or a larger share of the revenue generated from its resources.

Ernst & Young has recently ranked protectionism by governments through resource nationalism as the number one risk for mining companies in 2013. This alert looks at the impact of risks associated with resource nationalism on infrastructure projects and how those risks might be mitigated.

The relevance to infrastructure projects

While the main consuming markets are found in North America, Europe and increasingly Asia, the search for oil, gas, metals and minerals has shifted to emerging and developing countries with under-explored resources, such as in Latin America and Africa.