Energy and EnvironmentThe Risk Radar

August 2019: Resource nationalism

Recently, Indonesian president Joko Widodo announced a possible export ban on nickel ore sooner than anticipated by the market, raising the risk of a tighter supply next year. The original plan was for Indonesia to ban exporting nickel ore by 2022, as part of the country’s plan to build up its manufacturing base by using the country’s raw resources. Indonesia’s nickel miners association has urged the government not to advance the ban from 2022 and to pursue further “resource nationalism”.

Resource nationalism is the tendency of governments to take greater control of natural resources. This can take the form of government measures such as tax pressures, changing contractual terms and strict regulations of the mining sector. According to the latest Resource Nationalism Index, globally, the risk of resource nationalism has increased over the past year, which can be explained by the emergence of protectionism and nationalism. As many as 30 countries have registered a significant increase in resource nationalism risk metrics, 21 of which countries are considered major producers of oil, gas and minerals.

Resource nationalism is mostly a response to two cyclical processes in a country. The investment cycle pushes countries rich in resources first to adopt liberal regulations. If investments are made, governments start to regain control over the resources. Another cycle is the electoral cycle. Incumbent governments often seek to increase their support by exploiting the populist appeal of resource nationalism, as is currently happening in Zambia.

The index specifically mentions Russia and the DRC, which were downgraded to “extreme risk”. The DRC is a bellwether for a broader tendency of resource nationalism on the African continent. Although Africa has long been recognized as a high-risk area, the report shows that the risk has increased in 10 African nations over the past year. Over the past two years, international miners and their host governments have especially clashed over tax changes and other regulatory imposts in the DRC and in Tanzania. Both countries rewrote their mining codes, claiming that the existing regulations unfairly benefited foreign investors at the state’s expense. This tendency of resource nationalism has also reached Zambia, a country bordering both the DRC and Tanzania, and the world’s seventh-largest copper producer, as its government has gradually been clamping down on private, and particularly foreign, influence in the mining sector.


  • The term “critical” is added to natural resources increasingly often, resulting from growing awareness of global trends, such as population growth, increased consumption, and pollution. As the criticality of resources increases, resource nationalism will further rise globally.
  • As we wrote before, critical resources might in future no longer refer only to the usual suspects such as oil and minerals. Indeed, oil and rare earth metals are critical resources for our modern industrialized society. However, over the last months, many alarming reports have informed us about a new class of critical resources. Traditional natural elements such as land, water and air are now increasingly being framed as such. For instance, in its latest report, the internationally accepted authority on climate change, the IPCC, calls land a “critical resource”. The criticality of fertile land, freshwater and clean air are a risk to the basic foundation of living in all countries.


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