The turning tide of resource nationalism The resource nationalism tide that has scared energy, mining and agribusiness executives around the world over the last decade may start to ebb. Since the commodities supercycle took off in 2002, the threats of tax increases, renegotiation of terms, larger participation of state-owned companies and ultimately nationalisation have been looming over the natural resources industry. Governments including Australia, Russia, Peru and Algeria have demanded a larger slice of the commodities boom, raising taxes and royalties. The resource nationalism tide has flooded every important commodities country: rich and developed states such as the UK where the government hiked taxation of North Sea oil and gas production, and poor and developing countries such as Zambia, where the new government wants to negotiate larger stakes in mining groups. But now some executives tell me they believe the balance of power is starting to shift back to companies. Or, as they say, at the very least the conversation between governments and the companies is not longer a diktat but rather a discussion. It is early days, but if the tide has indeed turned, the industry would breathe a sigh of relief, reducing one of the biggest sources of cost inflation since 2002. The main reason behind a shift is that natural resources groups are slowing down - or even talking about cancelling - their investment programme, allowing them to play country against country. The slowdown in capex is the result of a weaker outlook for commodities prices over the next five years and rising anger from investors that are demanding larger dividends. Natural resources companies with a pipeline of, say, five projects in five different countries are now likely to build just two or three of those. Thus, executives have the power to cherry pick which combination of country and project offers the best returns. The threat of a cancellation - or long delays - could be a powerful incentive for politicians to offer better terms to companies, executives mutter. In particular, local and regional politicians will be particularly prone to lobby in companies" favour in the hope of securing jobs and investments. Natural resources executives say they see already the first signs of a retreat from the resource nationalism trend in Australia and in many countries in Africa. The shift is, however, less evident in Latin America, where companies, particularly in the mining and agribusiness sector, continue investing strongly. To be sure, resource nationalism is unlikely to disappear altogether unless the world sees a long period of low prices - similar to those of the late 1990s and early 2000s, a prospect no one in the industry anticipates. As Alexandre Chambrier, Gabon's minister of mining, told me last year about the resource nationalism trend, it is very difficult for government to defend "tax arrangement of the 1980s and the 1990s" while commodities prices remain high. But if commodities prices remain weak and companies delay and cancel projects, it would be as difficult to justify a bigger take. Thus, going forward, commodities executives might be dealing with resource nationalism-lite rather than its death.