A mineral deposit is finite and so are the taxes governments derive from a project. This infographic takes a look at the choices a government needs to make.
Being well endowed with resources may be beneficial for a developing country, but an abundance of resources with finite lifespans can make it difficult for governments to decide how to best spend or invest their wealth.
There are a series of choices policy makers need to make, each with own pros and cons:
Should countries invest abroad or domestically?
Should revenues be consumed with public or private spending?
Should revenues go towards real assets or financial assets?
Should citizens receive payment directly or should it be spent on public infrastructure?
What happens after the resource is depleted?
The infographic below uses the research of Amir Lebdioui to walk through the consequences of government decisions over resource revenue.
TMAC Resources (TSX: TMR) efforts to sell its Hope Bay Gold Project to Shandong Gold Mining had been abruptly ended by the Canadian Government,...
Yamana Gold (TSX: YRI) (NYSE/LON: AUY) is growing its position in the Abitibi Greenstone belt of Québec, Canada, by acquiring Monarch Gold (TSX: MQR)...
For the top 10 deals, over ~95 Moz of gold switched hands in 2021 valued at over $17.5 billion.