A surge in mining resource nationalisation from 2020, is set to continue this year and into 2022

A“flare up” in mining resource nationalisation from 2020, is set to continue this year and into 2022, reports financial risk management, solutions and insights firm Fitch Solutions Country Risk and Industry Research (Fitch Solutions) (Fitch Solutions).

Over the past 12 months, resource nationalism in top mining jurisdictions has flared up around the world, mostly in emerging markets – a trend it expects to continue over the coming few years, as underlying drivers of resource nationalism and government intervention will remain in play.

Fitch Solutions explains that resource nationalism can take several forms, including the renegotiation of existing mining contracts to get better terms (such as that currently taking place in the Democratic Republic of Congo, or DRC, and Mongolia) and an increase in taxes or royalties on the mining sector (such as in Chile, Peru and Russia).

Also, resource nationalism can be in the form of asset nationalisation (such as forced equity transfers) or the threat thereof (such as in Zambia, Mexico and Zimbabwe), in-country beneficiation (such as in Indonesia), or export restrictions.

From 2020 to present, Fitch Solutions has noticed a rise in resource nationalism or the risk thereof in an extensive and fast-rising number of countries, mainly in sub-Saharan African countries, including the DRC, Mali, Zimbabwe, South Africa and Guinea.

In addition, the firm also saw growth in resource nationalism in places like Latin America, including Mexico, Peru and Chile; the US; and in Europe and Asia, including in Russia, Indonesia and Mongolia.


According to Fitch Solutions, several factors will incentivise governments to consider intervening in the mining sector and tightening mining regulations – several which have been accentuated in recent quarters, mostly by the Covid-19 pandemic.

The rally in mineral and metal prices in 2020/21 has revived the interest in the mining and metals sector and boosted potential tax and royalty returns for governments – a trend Fitch Solutions forecasts to remain elevated in 2022.

Further, improved prospects for green energy transition minerals (which include copper, nickel, lithium and cobalt, besides others), amid the ongoing acceleration in decarbonisation efforts at multiple levels, are resulting in a sharp rise in investment in new projects.

In turn, this is prompting governments to ensure their countries benefit from these trends, says Fitch Solutions.

Also, the firm says, increased economic/fiscal hardships, and rising social inequality in the wake of Covid-19, are providing strong incentives for a rise in government intervention in the mining sector.

Another key driver of resource nationalism is political risk linked to elections. In this regard, the recent election of left/social-leaning governments in the US and Peru for example, is a factor behind potential changes to mining regulations in these countries, says Fitch Solutions.

Sudden changes in governments, which have happened in some countries recently, also usually increase the risk of a change in regulation.

In this regard, the firm points out that, in Mali, two coups were affected in 2020 and 2021.

Another driver of mineral nationalism is contested campaigns, which serve to increase nationalism rhetoric ahead of elections to gain support. This, Fitch Solutions says, happened in Zambia in 2020/21 for example, when former President Edgar Lungu used nationalistic rhetoric ahead of the August 2021 elections.

While elections happen regularly, their convergence with economic hardships and social tensions over rising inequalities pose an increased risk of resource nationalism, the firm states.


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