Barnett warns of resource nationalism

Colin Barnett has cautioned of a "growing tide" of African resource nationalism that has the potential to scare investors from the minerals-rich continent.

In a warning that has implications for more than 200 Australian companies with projects in Africa, the Premier has told the Mining Indaba conference that many developing nations feel they are not getting enough benefit from their natural resources.

"To use an African pun, it is the elephant in the room," Mr Barnett told _WestBusiness _ on the sidelines of the conference.

"There is certainly among a number of countries, a mood of nationalism coming in," Mr Barnett said. "I don't mean nationalisation (of projects), I don't think they'll go back to those days, but I think there is the prospect of quite heavy intervention. I think if it goes down that path, it will be seen as a real threat (to investors)."

Mr Barnett's comments come after talks with politicians from the 19-member COMESA trading bloc in Lusaka, Zambia last week, and another round of meetings with politicians, trade officials, miners and bankers in Cape Town. One focus of Mining Indaba has been industry nervousness about changing rules across African nations.

In the host nation, there is a Bill before parliament that would give wide discretion to declare certain minerals "strategically" important, allowing government to mandate that a proportion be processed into value-added materials domestically.

New rules requiring a minimum black ownership of 26 per cent of projects start this year.

The Democratic Republic of Congo has proposed a 50 per cent super profits tax on miners.

Guinea has introduced rules that see the Government "free carried" at 15 per cent and Kenya to 10 per cent.

Sheila Khama, director of the Centre for African Resources with the African Development Bank, said a "resurgence" of resource nationalism was being fuelled by changing perceptions by governments about "fair value" for access to resources.

There was a disproportionate expectation that projects should lift local communities from poverty almost immediately.

"We need to find a way to manage public expectations," she said. The reporter travelled to Cape Town as a guest of Gryphon Minerals.

The West Australian

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