Power Growth investors know the value of low political risk

Article Excerpt

Mining is inherently a politically vulnerable business; you can’t move the mine to another country to escape political trends. In some jurisdictions, local citizens and governments sometimes believe that a foreign mining company is robbing them of their birthright, even though they usually need the foreign company’s capital and expertise to get any value out of the ground. Recent examples are Venezuela’s seizure of Canadian miner Crystallex’s gold mine worth an estimated $1.2 billion U.S.; and the Mongolian government demanding a renegotiation of terms at Rio Tinto’s Oyu Tolgoi mine, the world’s third-largest copper complex. In developed countries, mining can be subject to changing regulatory and environmental constraints. Sometimes investors can’t completely avoid political risk. But it’s something we look at closely when recommending stocks for you to buy. buy…

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