From the AFR this morning comes an allegation from the boss of Glencore that Australia’s sovereign risk profile has deteriorated:
“We have spent a long time on roadshows [with investors] and one of the biggest questions on the roadshows was: ‘Glencore you are in difficult, risky countries. You’ve got a vast amount of assets in the Congo and Africa. You’ve got assets in Zambia, you’ve got assets in Colombia. You’ve got assets in Kazakhstan. These are risky countries. We are not so happy investing in you. We don’t know what these counties will do with you. We don’t know what taxes, royalties, nationalisation they’re going to do with you.
“I have to say Mrs Gillard made our life easy. Because we could say: ‘Look Australia just wants to nationalise 30 per cent of their mines’,” he said, referring to the minerals resource rent tax.
“We see it in Argentina today. You see it in every country today.
“Does Australia have its risks? Yes. We saw the carbon tax, we saw the mineral resources tax. It’s a First World country but it’s doing things that are making people cautious in investing. So Australia is becoming another country where you’ve got to make sure the rules aren’t gong to change on you.”
…“Africa, there, they need you more in those countries because you’re very key. Take the Congo. We’re a major player in the Congo, we have very big copper mines, we put over [$US]3 billion in the Congo and in the Congo [$US]3 billion is a lot more important to the country than [$US]3 billion in Australia.
“At least in the Congo they need you. They want you there and if they start changing the rules on you, you may not continue investing. In Australia your [$US]3 billion is not so big.”
