Managing Above Ground Risks in Africa

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Managing Above Ground Risks in Africa

• Corene Crossin
• Senior Consultant

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Outline

• What in the World is Going On?
• Political Risk Common Myths and Pitfalls
• What Works and How to Recognise It

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More Political Risk?
The ugly face of China's presence in Africa
Labour Strife Could Impact Copper Supplies
Mugabe Cancels Award of Uranium Project to
Australian Company
Transparency fears lead to review of Congo
mining contracts
Zambian Finance Minister Wants Higher Royalties
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Contemporary Themes

• Contract Reviews
• China

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Contemporary themes Mining Contract Reviews

• Resource nationalism under a new guise?
• Backdrop high commodity prices
• Similarities and differences
• Implications

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Contemporary Themes China in Africa

• Who will win?
• Short/Medium Term
• Chinese involvement presents challenges
• Longer Term
• A more level playing field?

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Outline

• What in the World is Going On?
• Political Risk Common Myths and Pitfalls
• What Works and How to Recognise It

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Common Myths and Misperceptions About Political
Risk
Country Risk Equals Project Risk
Political Risk is primarily about government
action
Political risk management is about getting good
PRI
Political risk is entirely exogeneous to the
investment
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Outline

• What in the World is Going On?
• Political Risk Common Myths and Pitfalls
• What Works and How to Recognise It

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Putting a Strategy Together
Typical Risks / Mitigation Tools Terror Attack Expropriation Community Unrest / Protest Local Government Interference Currency Inconvertibility Weak Regulator Bribe Demand
Political Risk Insurance a a X X a X X
JV Partners X X X X X X a
ECA Support X a X X X X a
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Any questions?

• Thank you!
• Corene Crossin
• corene.crossin_at_control-risks.com
• 44 20 7940 1910