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Expropriation: Is there an Increased Risk Government Intervention

When speaking of the risk of mining, Im often challenged with “well, that wont happen here”. In a previous post, I noted that the surge of geo-political volatility seen in 2024, with more 74 national level elections (including the EU) and already with a dozen more for 2025 including German and Canada. The inevitability of change, isn’t on the horizon, it’s here. New governments bring new mandates from the populist ideals that got them there, and that can include significant alterations of socio-economic policy landscape. Mining, could well be at the tip of that iceberg and miner’s need to be hyper mindful.

The mining sector has long been a pillar of global economic activity, but in recent years, it has faced an increasingly volatile political climate. From resource-rich countries in Africa to resource-dependent nations in Latin America, government intervention in mining operations has become more common—and often more aggressive. As governments demand larger shares of mining revenues and assert greater control over their domestic resources, private companies are confronted with growing risks, including nationalization and expropriation.

While this trend is hardly new, recent developments demonstrate a clear shift in the balance of power. National governments are increasingly willing to take a hardline stance against foreign mining companies, putting billions of dollars at risk and raising fundamental questions about the stability of investments in certain regions. Below, I post five examples of government intervention in mining and the heightened risks of expropriation that investors face.

1. Mali’s Seizure of Barrick’s Gold Assets

Most recently, a striking example of government intervention came in January 2025, when Mali’s ruling junta seized control of Barrick Gold’s operations in the country. Barrick had been operating the Loulo-Gounkoto mine, one of West Africa’s largest gold projects, but after Mali’s military government took power in a coup, the junta moved quickly to assert control over the nation’s valuable gold resources. The junta not only suspended Barrick’s operations but also froze assets, citing a series of alleged breaches of agreements and calling for the revision of mining contracts. As Barrick halted production, it faced the harsh reality of a volatile political environment and the risks associated with doing business in a country with an unstable regime (The Northern Miner, 2025).

This was not an isolated incident. Mali’s government, which has faced criticism for its autocratic tendencies, raised red flags for investors. Foreign mining firms operating in Mali—once one of the continent’s most stable mining environments—now find themselves increasingly vulnerable to the whims of the country’s military leaders.

2. Argentina’s “Super Profits” Tax on Mining

In 2023, Argentina introduced a controversial new tax on mining companies, targeting what the government called “super profits” earned by foreign corporations. Under the new rules, mining firms were required to pay an additional 8% tax on earnings derived from certain minerals, including lithium, one of the country’s most lucrative exports. The move came amid soaring global prices for lithium, which Argentina possesses in large quantities, particularly in the Lithium Triangle shared with Bolivia and Chile.

This tax was seen as a clear attempt to capture a larger share of the profits from Argentina’s booming lithium sector. Though the Argentine government denied that it was an act of expropriation, critics saw the move as part of a broader trend of encroachment on foreign businesses. Companies like Lithium Americas and Chinese-backed Tianqi Lithium, which have made significant investments in Argentina’s lithium-rich provinces, now face an environment of greater uncertainty, with the risk of further taxes or even outright nationalization if the political winds shift (Reuters, 2023).

3. Venezuela’s Nationalization of Gold Mines

Venezuela has long been a cautionary tale for mining investors, particularly since the government of Hugo Chávez began its campaign of nationalization in the early 2000s. However, recent developments have underscored the ongoing risks for companies operating in the country. In 2023, the Venezuelan government expropriated gold mines in the Orinoco Mining Arc, a region rich in gold and other precious metals, which was previously controlled by foreign operators, including Canadian companies like Crystallex International.

The nationalization process was accompanied by significant protests and criticism from the international community. However, the government of Nicolás Maduro justified the move by arguing that the state must protect its resources and ensure that mining wealth benefits the Venezuelan people. For foreign firms, this marked yet another episode of expropriation in a country where government intervention in the mining sector is the norm, and the risks of doing business—especially in the current political climate—are high (Bloomberg, 2023).

4. Zambia’s Push to Take Over First Quantum Minerals’ Assets

In 2024, Zambia made headlines when it threatened to expropriate the assets of First Quantum Minerals, a major player in the country’s copper industry. The government had already raised taxes and introduced new royalty rates on mining companies in an effort to increase its share of the sector’s profits. But things escalated when Zambia’s energy minister accused First Quantum of underreporting copper output and failing to meet local content requirements.

First Quantum, which operates one of the largest copper mines in Zambia, the Kansanshi Mine, found itself under intense pressure. The government’s move to seize control of its assets signaled a disturbing trend toward a zero-tolerance policy on perceived non-compliance. The company was forced to negotiate, and although a full expropriation was avoided, the incident highlighted the growing tensions between international mining firms and governments seeking to maximize their share of natural resource wealth (Mining.com, 2024).

5. Indonesia’s Pressure on Freeport McMoRan’s Grasberg Mine

Indonesia’s relationship with mining giant Freeport McMoRan has been fraught with tension for decades, and it reached a critical juncture in 2023 when the government moved to increase its control over the Grasberg mine—the world’s second-largest copper and gold mine. After years of negotiations, Freeport ultimately agreed to transfer a 51% stake in Grasberg to the Indonesian government, ending a long period of foreign dominance over the resource.

Indonesia’s push to nationalize parts of the Grasberg operation was rooted in a desire to increase its share of the wealth generated by the mine, particularly as copper prices surged. While the deal was negotiated amicably, the government’s aggressive stance on ownership rights exemplified the growing trend toward resource nationalism. The move was also seen as part of a broader global pattern where countries are increasingly unwilling to allow foreign companies to maintain control over their mineral wealth (Reuters, 2023).

Expropriation is a Risk, but not the only risk.

If I can stress one thing, is that governments do not have the answers to the problems they face. The velocity of political change reduces the long-range, thoughtful development that can move the dial for long term, national GDP growth.

New governments will flail with greater velocity, knowing that their mandates are in range of two years before midterms and reelection mode kicks in. The risks continue to emerge through changes in tax regimes,

The examples above underscore a troubling reality for multinational mining companies: the risk of expropriation and forced government intervention is rising, particularly in resource-rich countries with unstable political climates. From the military juntas of Mali to the resource nationalism of Latin America and Africa, governments are asserting greater control over their natural resources. This trend reflects broader geopolitical shifts and the increasing willingness of nations to prioritize their own economic interests, even at the expense of foreign investors.

For investors in the mining sector, these developments are a stark reminder that the potential for expropriation and government intervention is a real and growing risk. As governments look to extract more value from their mineral wealth, companies must reassess their risk management strategies and consider the implications of investing in politically volatile regions. With the global mining landscape shifting rapidly, navigating the complexities of international resource extraction has never been more perilous.