A systematic approach to political risk analysis for extractive industries

CIM Bulletin, Vol. 76, No. 858, 1983
WILLIAM D. COPLIN, Director, Public Affairs Program, Maxwell School, Syracuse University, Director, Political Risk Services, Frost and Sullivan, Inc., MICHAEL K. O'LEARY, Professor, Political Science, Maxwell School, Syracuse University, Director, Political Risk Services, Frost and Sullivan, Inc.
Abstract Risks from political instability and government policies restricting equity ownership, local operations and transfers of payments affect the profitability of foreign mining ventures. More than seat-of-the-pants judgments and old-boy networks are required to anticipate these risks and to take actions appropriate to offsetting them. A system for making political forecasts, called the Prince System, and a series of charts relaying risks to a production of key minerals will be presented.
Keywords: Risk management, Mineral economics, Extractive industry, Political risk, Governments, Equity ownership, Forecasting, Prince Model
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