Introduction

In June 2021, Swann Group founder, John Murray, was invited to present at the Critical Minerals Associations G7 event in Cornwall to discuss the importance of mining to society.

In his talk John highlighted six issues facing mining beyond the immediate challenge of the pandemic.

In this series of articles, John expands on his G7 presentation and explores those challenges in more detail. In some cases, he makes some suggestions for how we might address them, based both on interviews with some of the mining greats and his own lifetime of experience in the industry. In others, he poses questions to provoke thought and discussion for inclusion in a future update.

The articles are gathered in a single publication readers can download from the Swann Group website research page: the-swann-group.com/research/.

In this fourth article John explores the rise of nationalism and the impact on mining.  

Rising nationalism

Miners need to recognise that developing countries will increasingly seek to renegotiate agreements and increase their revenues and self-sufficiency. Exploitation over past decades will need to be addressed, and we've seen equitable new mining conventions negotiated with governments in Sierra Leone, Mali and the DRC in recent years.

But governments will become more demanding under pressure to appease local demands for better living standards; demands intensified as people use social media to vent their frustration and compare their living standards with their regional counterparts.

At the very least, these governments will expect miners to invest in local processing and refining facilities to keep value adding processes within their jurisdiction.

Mining companies will increasingly need to consider the balance between the removal, retention and contribution of wealth in their relationship with any country. Governments that focus purely on the money will need convincing of the education, employment and infrastructure development opportunities than mining can bring. Miners that fail to manage expectations or communicate effectively with local governments and communities will quickly find themselves facing political difficulties.

Such demands are not restricted to developing counties. When the West Australian Government ran into difficult budgetary problems it demanded a very significant increase in the iron ore royalty from Rio Tinto and BHP.

Firms and nations that have become heavily dependent on China will need to be aware that the country will always be searching for alternative and more economic supplies of iron ore and coal as part of a China First policy.

We can only expect such demands and nationalism to intensify. The shift in the global power paradigm and the subsequent threat to trading routes are prompting nations to act proactively to secure sourcing of strategically important materials integral to military infrastructure (manganese, vanadium, tungsten) - either by forging new, unexpected alliances or by sourcing materials domestically.

Mining will always be a strategic priority for any nation-state. But we must seek equitable treatment with other, equally impactful industries. Big tech companies, many of which have turnovers larger that the countries in which they operate. These companies have proved themselves masters at hiding their considerable environmental impact. I am not suggesting mining copies this sleight of hand but rather surfaces the issue to establish equivalence in any debate about the impact of different industries.