Mining Nationalization risk and increased taxation

[noirua]

Nationalization worries and increased taxes in South Africa and many areas of the World, make many mining companies vulnerable to a sudden reversal in their share price.

It is worth looking closely at a mining companies portfolio to see the likely problems down the line.

http://www.stockhouse.com/shfn/editorial.asp?edtID=19381

 

[Jadefox]

One of the consequences is that it could make Australian stocks more attractive takeover targets.

 

[noirua]

The complex problems of mining in potentially dodgy places are indeed high risk. The problems in Bolivia do indeed show us that Australia has a very low risk factor: http://boliviarising.blogspot.com/2007/06/mining-policy-in-morales-administration_10.html

 

[noirua]

With the sudden crash in stock prices in the mining sector and the general lack of cash available, it could now be the turn of Australia to be the first country to bail out a major company in the mining sector.

The sudden slide in expected revenues, particularly in Western Australia, NSW and Queensland, could lead to an increase in royalties and taxes.

 

[nick2fish]

I don't think so .... The crash in resource stock share price is a direct result of market turmoil and commodity price bubble deflation.
Sure it will hurt the Australian economy if ongoing but expecting hand-outs for mining companies going belly up... forget it.
How long did it take the Liberals to rescue farmers from the once in 100yr drought ?
In the business world there are risks and shrinking profit margins is surely just a test of ones fundamentals.
I think the Carbon Trading scheme will kill off a lot more miners than this temporary market disruption will IMO

 

[noirua]

With the sudden crash in stock prices in the mining sector and the general lack of cash available, it could now be the turn of Australia to be the first country to bail out a major company in the mining sector.

The sudden slide in expected revenues, particularly in Western Australia, NSW and Queensland, could lead to an increase in royalties and taxes.

Taxes and royalties have risen, but commodity price reductions have taken this away and more.
Coming closer now is the first mining industry nationalisation and the need for State bailouts.

 

[Julia]

Taxes and royalties have risen, but commodity price reductions have taken this away and more.
Coming closer now is the first mining industry nationalisation and the need for State bailouts.

Noirua, yesterday you wanted BNB bailed out, now it's the mining companies!
Where do you think all these bail out dollars are going to come from?

 

[Aussiejeff]

Noirua, yesterday you wanted BNB bailed out, now it's the mining companies!
Where do you think all these bail out dollars are going to come from?

Currently, there's only one country on the planet with enough cash reserves to lend out - China.

Of course, it has to be paid back some time - with interest.

China has become the world's largest "investment bank" - the US and Europe would be sunk without a trace as far as bailouts go without current Chinese generosity (will it last though?).

So, let us all pray in Mandarin that China doesn't have their very own Ponzi Madeoff madman teetering on the tip of their fragile Financial Pyramid... ready to wreak havoc.