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Government participation in mining projects

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  • Gerald Padmore

Abstract

Governments of developing countries may obtain ownership participation in national mining projects in the hope of receiving greater policy control over, financial rewards from, and information about such projects. These objectives could be achieved by using their sovereign authority to tax, regulate and monitor projects more effectively. The principal problem is likely to be the administrative inability fully to enjoy rights that they lawfully possess. As such projects are nearly always controlled by foreign entities, and involve the exploitation of irreplaceable mineral wealth, they may engender feelings of suspicion and hostility. Government participation may sometimes be necessary to mitigate those feelings and to lead to more stable and successful projects. If these political objectives are fully recognized, then government participation may be structured so as to minimize any detrimental effect it might have on the fiscal and financial structure of the project. It may also prove to be a vehicle for future participation by private local interests, thereby eliminating the alien enclave feature generally characteristic of such projects.

Suggested Citation

  • Gerald Padmore, 1992. "Government participation in mining projects," Natural Resources Forum, Blackwell Publishing, vol. 16(2), pages 132-140, May.
    • Handle: RePEc:wly:natres:v:16:y:1992:i:2:p:132-140
    DOI: 10.1111/j.1477-8947.1992.tb00559.x
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    References listed on IDEAS

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    1. Craig B. Andrews, 1991. "Mining investment promotion," Natural Resources Forum, Blackwell Publishing, vol. 15(1), pages 50-58, February.
    2. Shafer, Michael, 1983. "Capturing the mineral multinationals: advantage or disadvantage?," International Organization, Cambridge University Press, vol. 37(1), pages 93-119, January.
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