By Bob Johnson
Seeking Alpha 

There is a sea change going on in the mining industry. Changes are taking place in that industry which will have effects on the firms involved, their suppliers and customers, for years to come. The three largest of these changes are:

  1. A resurgence of resource nationalism, the #1 risk to miners
  2. Tighter restrictions on capital expenditures
  3. Dismissal of top management

Other issues are changing the way mining will go forward. On the surface, the risks do not look all that different from those of the past. However, the “disconnect” between shareholders and mining management regarding financial expectations caused a quantum shift in CAPEX strategy. This has increased the significance of the risks facing the industry; they must be accorded more weight in the changing investment environment. As well as resource nationalism, these risks include:

  • Labor issues including strikes, sometimes resulting in violence; increased labor costs
  • Environmental concerns
  • Lack of skilled workers
  • Poor Infrastructure in new locations – water, power, roads, railroads
  • Inconsistent and changing government policies
  • Environmental concerns, including global warming

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