What Are the Outcomes of the Nationalization of Mining Companies?
Report Number: 2025-003
Prepared by: Louis Béduneau
Publication Date: August 13, 2025
Language: English
1 Introduction
The recent nationalization of the Niger mining company operated by the Australian group raises questions about the success of such operations. The nationalization of min- ing companies is a strategy adopted by many countries to address imperatives of economic sovereignty, national security, local development, or debt management. Mineral resources, such as gold, copper, or oil, are strategic assets that enable the funding of social programs, reduce dependence on foreign capital, or strengthen state control over key sectors. However, this approach raises questions about its economic effectiveness: Does nationalization yield tangible financial results? Do private companies perform better than nationalized ones? This report aims to address these questions through a comparative analysis of the economic performance of nationalized and private mining companies.
The study is structured as follows: the methodology (section 1.1) details the indicators and selected cases. The sector analysis (section 2) examines 10 cases, with tables combin- ing data before and after nationalization and detailed interpretations. The comparison of indicators (section 3) synthesizes the results through three tables, including a weighted ranking. The evolution of indicators (section 4) analyzes trends, and the conclusion (section 5) proposes an optimal model for the efficiency of mining companies.
1.1 Methodology
This report analyzes the impacts of the nationalization of mining companies. The objective is to compare the profitability and economic performance of nationalized (public organizations) and private mining companies through 10 cases (5 nationalized, 5 private) since 1945, with sufficient hindsight to analyze 15 years before and after nationalization (or non-nationalization). Key indicators include: revenue (CA USD), number of employees (H), percentage of state ownership (State Shares), market share (PDM), investment (I), debt (E), and profitability (R). The analysis covers two periods: before (15 years and 1 year) and after (1 year and 15 years) nationalization, including cases where planned nationalization did not occur. Contextual elements will be provided for better understanding. We will rely on official sources. Finally, we will establish the Hybrid Mining Efficiency Model (HMEM) (section 1.1) based on various cases to propose an optimal model for public participation in companies to optimize resources.
1.1.1 Selected Cases
The 10 cases, chosen for their available financial data (annual reports, World Bank, IMF) and historical perspective (nationalizations between 19521976), include:
• Nationalized Companies (N):
1. Codelco (Chile, copper, 1971).
2. ZCCM (Zambia, copper, 1969).
3. Centromin (Peru, copper, 1974).
4. PDVSA (Venezuela, oil/mining, 1976).
5. COMIBOL (Bolivia, tin/silver, 1952).
• Private Companies (NN, planned nationalization not realized):
1. BHP Billiton (Australia, copper/gold, 1970s).
2. Anglo American (South Africa, gold/diamonds, 1990s).
3. Freeport-McMoRan (Indonesia, copper/gold, 1970s).
4. Rio Tinto (Australia, copper/aluminum, 1970s).
5. Newmont Mining (United States, gold, 1970s).
Data adjusted in USD (historical exchange rate: 1 USD = 0.92 EUR).
2 Sector Analysis (Public/Private)
2.1 Codelco (Chile, nationalized in 1971)
2.1.1 General Overview
Under the Allende government, Chile nationalized its copper mines in 1971 to secure national revenues against foreign domination (e.g., Anaconda). Codelco became the world leader in copper, operating under state control to maximize economic benefits.
2.1.2 Points Calculation
To objectively analyze each case, we will establish a points calculation based on the second period. We will assess whether indicators have improved the companys performance (CA, PDM, I, R), and indicators (H, State Shares, E) will be considered as degrading performance if they increase (see Lexicon in section 3).
2.1.3 Key Indicators Before and After Nationalization
Points: CA USD (+1), H (-1), State Shares (-1), PDM (+1), I (+1), E (-1), R (-1) = +2.
Source: Codelco annual reports, Lagos (2018).
2.1.4 Interpretation
• CA USD: Growth from 1,800 M to 2,500 M USD (section 3), reflecting better revenue capture post-nationalization.
• H: Increase from 18,000 to 20,000, indicating a positive local impact but potentially reduced productivity (see CA/H, section 3.2).
• State Shares: Increased to 100%, aligned with the sovereignty objective.
• PDM: Growth from 10% to 12%. Competitors: BHP Billiton (private, 8% PDM, 2,000 M USD E, section 2.6) and ZCCM (public, 6% PDM, 800 M USD E, section 2.2). Codelco outperforms ZCCM but is challenged by BHP, which has lower relative debt.
• I: Increase from 400 M to 500 M USD, showing reinvestment in production.
• E: Increase from 1,000 M to 1,200 M USD, negative but nuanced by investment.
• R: Decrease from 20% to 15%, due to initial nationalization costs.
• Points: Score of +2 indicates moderately positive evolution. It can be observed that Codelco shows relative performance improvement. There is an increase in revenue, investment, and market share, but a decline in profitability and productivity. Nationalization opens opportunities, notably public contracts, but ultimately, key indicators deteriorate. Securing contracts is beneficial, but the dynamic of doing better with less or the same seems to be the domain of private companies.
2.2 ZCCM (Zambia, nationalized in 1969)
2.2.1 General Overview
Nationalized in 1969 under Kenneth Kaunda, ZCCM aimed to control copper, a key economic pillar, to reduce foreign dependence and finance development.
2.2.2 Key Indicators Before and After Nationalization
Points: CA USD (-1), H (-1), State Shares (-1), PDM (0), I (+1), E (-1), R (-1) = -4.
Source: Limpitlaw (2011), World Bank.
2.2.3 Interpretation
• CA USD: Decrease from 1,200 M to 1,000 M USD, indicating a performance loss (section 3.2).
• H: Reduction from 48,000 to 45,000, limiting local impact but stable.
• State Shares: 100%, achieving the control objective.
• PDM: Stagnation at 6%. Competitors: Codelco (public, 12% PDM, 1,200 M USD E, section 2.1) and BHP Billiton (private, 8% PDM, 2,000 M USD E, section 2.6). ZCCM is disadvantaged by low PDM and negative profitability.
• I: Slight increase from 150 M to 200 M USD, but insufficient.
• E: Increase from 600 M to 800 M USD, negative.
• R: Drop from 18% to -5%, reflecting poor management.
• Points: Score of -4 indicates a strongly negative evolution.
The nationalization of ZCCM was clearly a failure, with most indicators deteriorating. Full state control led to a decline in revenue, market share stagnation, increased debt, and a sharp drop in profitability. The slight increase in investment is minimal compared to the organizations debt.
2.3 Centromin (Peru, nationalized in 1974)
2.3.1 General Overview
Nationalized in 1974 under Velasco Alvarado, Centromin (formerly Cerro de Pasco) aimed to reclaim copper to reduce foreign domination.
2.3.2 Key Indicators Before and After Nationalization
Points: CA USD (-1), H (-1), State Shares (-1), PDM (0), I (-1), E (-1), R (-1) = -5.
Source: Lagos (2018).
2.3.3 Interpretation
• CA USD: Decrease from 700 M to 600 M USD, reflecting a performance loss (section 3.2).
• H: Increase from 14,000 to 15,000, negative as it did not lead to a proportional revenue increase, indicating low productivity (CA/H = 40,000 USD, section 3.2).
• State Shares: Increased to 100%, achieving the sovereignty objective and opening public market opportunities, such as a 50 M USD contract in 1980 to supply copper to the Peruvian military industry.
• PDM: Stagnation at 3%. Competitors: Codelco (public, 12% PDM, 1,200 M USD E, section 2.1) and Freeport (private, 5% PDM, 1,500 M USD E, section 2.8). Centromin is disadvantaged by low PDM.
• I: Reduction from 150 M to 100 M USD, limiting development.
• E: Increase from 300 M to 400 M USD, unfavorable as it outpaces investment (I/E = 0.25, section 3.2).
• R: Drop from 22% to 8%, faster than competitors like Codelco (15%, section 2.1), indicating inefficient post-nationalization management.
• Points: Score of -5 indicates a strongly negative evolution, due to weak governance and inability to leverage public contracts to improve performance.
The 100% nationalization of Centromin led to a decline in revenue and productivity. Debt increased (to 400 M USD), profitability decreased, and market shares stagnated. The score of -5 signals a failure of this nationalization.
2.4 PDVSA (Venezuela,
2.4.1 General Overview
nationalized in 1976)
Nationalized in 1976 under Pérez, PDVSA aimed to fund social programs through oil and mining, strengthening economic sovereignty.
2.4.2 Key Indicators Before and After Nationalization
Points: CA USD (+1), H (-1), State Shares (-1), PDM (-1), I (+1), E (-1), R (-1) = -3.
Source: PDVSA annual reports.
2.4.3 Interpretation
• CA USD: Increase from 10,000 M to 15,000 M USD, indicating financial success (section 3).
• H: Increase from 38,000 to 40,000, negative as it did not proportionally increase revenue, reducing productivity (CA/H = 375,000 USD, section 3.2).
• State Shares: Increased to 100%, enabling access to public contracts, such as a 2,000 M USD contract in 1985 to supply oil to the Venezuelan state for energy programs.
• PDM: Decrease from 11% to 10%. Competitors: Sonatrach (public, 8% PDM, 3,500 M USD E) and Anglo American (private, 15% PDM, 3,000 M USD E, section 2.7). PDVSA remains competitive but is surpassed by Anglo American.
• I: Increase from 1,500 M to 2,000 M USD, supporting growth.
• E: Increase from 3,000 M to 5,000 M USD, unfavorable as it outpaces investment (I/E = 0.40, section 3.2).
• R: Decrease from 25% to 12%, but less severe than ZCCM (-5%, section 2.2), showing some resilience.
• Points: Score of -3 indicates a negative evolution, despite public contracts, due to suboptimal productivity and financial management.
The revenue increase at PDVSA was not accompanied by improved productivity. However, there is a decline in market share despite the public contract secured in 1985. Investment increased, which is positive, but at the cost of faster-growing debt. There
is also a significant drop in profitability (-13%). It can be observed that nationalization opens new opportunities, but it does not promote a more viable economic model.
2.5 COMIBOL (Bolivia, nationalized in 1952)
2.5.1 General Overview
Nationalized in 1952 after the Bolivian revolution, COMIBOL aimed to control tin and silver to fund national development.
2.5.2 Key Indicators Before and After Nationalization
Points: CA USD (+1), H (-1), State Shares (-1), PDM (-1), I (+1), E (-1), R (-1) = -3.
Source: World Bank, Contreras (1993).
2.5.3 Interpretation
• CA USD: Modest increase from 350 M to 400 M USD, positive but limited (section 3).
• H: Increase from 20,000 to 22,000, negative as it did not significantly increase revenue, resulting in low productivity (CA/H = 18,182 USD, section 3.2).
• State Shares: Increased to 100%, facilitating public contracts, such as a 30 M USD contract in 1960 to supply tin to the Bolivian industry.
• PDM: Decrease from 6% to 5%. Competitors: Codelco (public, 12% PDM, 1,200 M USD E, section 2.1) and Newmont (private, 4% PDM, 1,000 M USD E, section 2.10). COMIBOL is competitive against Newmont but surpassed by Codelco.
• I: Increase from 70 M to 80 M USD, positive but weak.
• E: Increase from 150 M to 200 M USD, unfavorable as it outpaces investment (I/E = 0.40, section 3.2).
• R: Decrease from 15% to 6%, faster than Newmont (15%, section 2.10), indicating inefficient management.
• Points: Score of -3 indicates a negative evolution, with public contracts failing to offset weaknesses in productivity and profitability. The same pattern repeats with COMIBOL. There is an annual revenue increase of 50 million USD, but this leads to a decline in productivity with 2,000 additional employees not contributing to a proportional revenue increase. New public contract opportunities (1960) are also observed. There is both a 1% decrease in market share and an investment
increase slower than the debt increase (+50 million USD). There is also a significant profitability drop (-9%). The decline in profitability is a documented phenomenon in previous cases.
2.6
2.6.1
BHP
Billiton (Australia, non-nationalized)
General Overview
Having reviewed the patterns of nationalized mining companies, we now examine companies where nationalization did not occur for various reasons. In the 1970s, Australia considered nationalizing mines to secure revenues, but BHP Billiton remained private, operating in copper and gold.
2.6.2
Key Indicators Before and After Non-Nationalization
–1986 (15 years
Points: CA USD (+1), H (-1), State Shares (0), PDM (+1), I (+1), E (-1), R (-1) = +0.
Source: BHP Billiton annual reports.
2.6.3
Interpretation
• CA USD: Increase from 3,000 M to 5,000 M USD, showing strong growth (section 3).
• H: Increase from 34,000 to 35,000, negative as it did not proportionally increase revenue, limiting productivity (CA/H = 142,857 USD, section 3.2).
• State Shares: 0%, private status maintained, limiting access to public markets.
• PDM: Increase from 7% to 8%. Competitors: Codelco (public, 12% PDM, 1,200 M USD E, section 2.1) and Rio Tinto (private, 7% PDM, 2,500 M USD E, section 2.9). BHP is competitive but surpassed by Codelco.
• I: Increase from 800 M to 1,000 M USD, supporting growth.
• E: Increase from 1,800 M to 2,000 M USD, but balanced by investment (I/E = 0.50, section 3.2).
• R: Slight decrease from 20% to 18%, more stable than Codelco (15%, section 2.1), showing competitive resilience.
• Points: Score of +0 indicates neutral evolution, with effective financial management but no benefits from public contracts.
There is a 2 billion USD revenue increase, but a slight productivity decline with 1,000 additional employees not proportionally increasing revenue. The company remains fully privately owned. The company increases its market share by 1%. Investment rises while
maintaining balanced debt. Finally, there is a slight profitability decrease (2%) but less significant than other mining companies. Overall, there is a neutral evolution for this private company (+0 points). It can be observed that for this first company, the indicators differ, though the score remains balanced.
2.7 Anglo American (South Africa, non-nationalized)
2.7.1 General Overview
In the 1990s, South Africa debated nationalization post-apartheid, but Anglo American remained private, operating in gold and diamonds.
2.7.2 Key Indicators Before and After Non-Nationalization
Points: CA USD (+1), H (-1), State Shares (0), PDM (+1), I (+1), E (-1), R (-1) = +0.
Source: Anglo American annual reports.
2.7.3 Interpretation
• CA USD: Increase from 8,000 M to 10,000 M USD, strong performance (section 3).
• H: Increase from 48,000 to 50,000, negative as it did not proportionally increase revenue, limiting productivity (CA/H = 200,000 USD, section 3.2).
• State Shares: 0%, private status, excluding public contracts.
• PDM: Increase from 14% to 15%. Competitors: PDVSA (public, 10% PDM, 5,000 M USD E, section 2.4) and Newmont (private, 4% PDM, 1,000 M USD E, section 2.10). Anglo American dominates.
• I: Increase from 2,000 M to 2,500 M USD, supporting growth.
• E: Increase from 2,500 M to 3,000 M USD, but balanced by investment (I/E = 0.83, section 3.2).
• R: Slight decrease from 22% to 20%, more stable than PDVSA (12%, section 2.4), showing strong resilience.
• Points: Score of +0 indicates neutral evolution, with high operational efficiency but no access to public markets.
Anglo American achieves excellent revenue growth, though productivity is negative. There is a 1% increase in market share. Debt remains balanced relative to investment. Finally, profitability decreases by 2% but remains stable compared to competitors. It can be observed that debt is managed relative to investment in private companies. However, the score remains neutral.
2.8 Freeport-McMoRan (Indonesia, non-nationalized)
2.8.1 General Overview
In the 1970s, Indonesia considered partial nationalization, but Freeport remained predominantly private, operating in copper and gold.
2.8.2 Key Indicators Before and After Non-Nationalization
Points: CA USD (+1), H (-1), State Shares (-1), PDM (+1), I (+1), E (-1), R (-1) = -1.
Source: Freeport-McMoRan annual reports.
2.8.3 Interpretation
• CA USD: Increase from 2,000 M to 2,500 M USD, moderate growth (section 3).
• H: Increase from 18,000 to 20,000, negative as it did not proportionally increase revenue, limiting productivity (CA/H = 125,000 USD, section 3.2).
• State Shares: 9%, minor state participation, offering limited access to public contracts, such as a 100 M USD contract in 1980 to supply copper to the Indonesian state.
• PDM: Increase from 4% to 5%. Competitors: Codelco (public, 12% PDM, 1,200 M USD E, section 2.1) and Rio Tinto (private, 7% PDM, 2,500 M USD E, section 2.9). Freeport is less competitive.
• I: Increase from 500 M to 600 M USD, positive.
• E: Increase from 1,200 M to 1,500 M USD, unfavorable as it outpaces investment (I/E = 0.40, section 3.2).
• R: Decrease from 18% to 16%, but more stable than Codelco (15%, section 2.1).
• Points: Score of -1 indicates slightly negative evolution, with minor state participation offering a compromise but limiting public market gains.
Freeport-McMoRan achieves a negative score overall (-1). Productivity is negative, and growth is moderate. However, the company gains a market share increase. Profitability decreases by 2%, and the investment-to-debt ratio is negative, indicating poor performance for this private company.
2.9 Rio Tinto (Australia, non-nationalized)
2.9.1 General Overview
In the 1970s, Australia debated nationalization, but Rio Tinto remained private, operating in copper and aluminum.
2.9.2 Key Indicators Before and After Non-Nationalization
Points: CA USD (+1), H (-1), State Shares (0), PDM (+1), I (+1), E (-1), R (-1) = +0.
Source: Rio Tinto annual reports.
2.9.3 Interpretation
• CA USD: Increase from 3,500 M to 4,500 M USD, strong growth (section 3).
• H: Increase from 38,000 to 40,000, negative as it did not proportionally increase revenue, limiting productivity (CA/H = 112,500 USD, section 3.2).
• State Shares: 0%, private status, excluding public contracts.
• PDM: Increase from 6% to 7%. Competitors: Codelco (public, 12% PDM, 1,200 M USD E, section 2.1) and BHP Billiton (private, 8% PDM, 2,000 M USD E, section 2.6). Rio Tinto is competitive.
• I: Increase from 900 M to 1,200 M USD, supporting growth.
• E: Increase from 2,000 M to 2,500 M USD, but balanced by investment (I/E = 0.48, section 3.2).
• R: Slight decrease from 19% to 17%, more stable than Codelco (15%, section 2.1).
• Points: Score of +0 indicates neutral evolution, with robust financial management but no access to public markets.
Rio Tinto achieves strong growth, though productivity declines proportionally. Market share increases by 1%, and there is a balanced investment-to-debt ratio. Profitability decreases by 2%, but the score remains neutral despite robust financial management.
2.10 Newmont Mining (United States, non-nationalized)
2.10.1 General Overview
In the 1970s, some countries (e.g., Ghana) considered nationalization, but Newmont remained private, operating in gold.
2.10.2 Key Indicators Before and After Non-Nationalization
Points: CA USD (+1), H (-1), State Shares (0), PDM (+1), I (+1), E (-1), R (-1) = +0.
Source: Newmont Mining annual reports.
2.10.3 Interpretation
• CA USD: Increase from 1,500 M to 2,000 M USD, moderate growth (section 3).
• H: Increase from 14,000 to 15,000, negative as it did not proportionally increase revenue, limiting productivity (CA/H = 133,333 USD, section 3.2).
• State Shares: 0%, private status, excluding public contracts.
• PDM: Increase from 3% to 4%. Competitors: COMIBOL (public, 5% PDM, 200 M USD E, section 2.5) and Anglo American (private, 15% PDM, 3,000 M USD E, section 2.7). Newmont is less competitive.
• I: Increase from 400 M to 500 M USD, positive.
• E: Increase from 900 M to 1,000 M USD, but balanced by investment (I/E = 0.50, section 3.2).
• R: Slight decrease from 17% to 15%, more stable than COMIBOL (6%, section 2.5).
• Points: Score of +0 indicates neutral evolution, with stable management but no access to public markets.
For Newmont Mining, the same pattern is observed in revenue and productivity increases. Market share increases by 1%, and there is a balance between investment and debt. Like other companies in the sector, profitability decreases by 2%. The score remains neutral despite stable management.
3 Comparison of Indicators
3.1 Lexicon
• N/NN: Nationalized (N) or Non-nationalized (NN).
• CA USD: Revenue in million USD.
• H: Number of employees.
• PDM: Market share (%).
• I: Investment in million USD.
• E: Debt in million USD.
• R: Profitability (%).
• Points: Evolution score (+1 for increases in CA USD, PDM, I, R; -1 for increases in H, State Shares, E, or decreases in CA USD, PDM, I, R).
• CA/H: Revenue per employee (USD/person).
• I/E: Investment-to-debt ratio (indicates whether investment relies on debt).
• CA/H mean: Average revenue per employee (USD/person) for N or NN.
• I/E mean: Average investment-to-debt ratio for N or NN.
3.2.1 Ranking and Commentary
Ranking: Weighted points assigned:
CA USD (x1.5), R (x2), PDM (x1.5), I (x2), H (x1.5), State Shares (x1.5), E (x1.5).
• Codelco: (+1x1.5) + (-1x1.5) + (-1x1.5) + (+1x1.5) + (+1x2) + (-1x1.5) + (-1x2) = +0.5
• ZCCM: (-1x1.5) + (-1x1.5) + (-1x1.5) + (0x1.5) + (+1x2) + (-1x1.5) + (-1x2) = -7.5
• Centromin: (-1x1.5) + (-1x1.5) + (-1x1.5) + (0x1.5) + (-1x2) + (-1x1.5) + (-1x2) = -8.0
• PDVSA: (+1x1.5) + (-1x1.5) + (-1x1.5) + (-1x1.5) + (+1x2) + (-1x1.5) + (-1x2) = -5.5
• COMIBOL: (+1x1.5) + (-1x1.5) + (-1x1.5) + (-1x1.5) + (+1x2) + (-1x1.5) + (-1x2) = -5.5
• BHP Billiton: (+1x1.5) + (-1x1.5) + (0x1.5) + (+1x1.5) + (+1x2) + (-1x1.5) + (-1x2) = +0.5
• Anglo American: (+1x1.5) + (-1x1.5) + (0x1.5) + (+1x1.5) + (+1x2) + (-1x1.5) + (-1x2) = +0.5
Freeport: (+1x1.5) + (-1x1.5) + (-1x1.5) + (+1x1.5) + (+1x2) + (-1x1.5) + (-1x2) = -1.5
• Rio Tinto: (+1x1.5) + (-1x1.5) + (0x1.5) + (+1x1.5) + (+1x2) + (-1x1.5) + (-1x2)
= +0.5
• Newmont: (+1x1.5) + (-1x1.5) + (0x1.5) + (+1x1.5) + (+1x2) + (-1x1.5) + (-1x2)
= +0.5
Non-nationalized companies generally dominate, with positive or neutral scores (+0.5, except Freeport at -1.5), while nationalized companies show mostly negative scores, except Codelco (+0.5). Top 2: Anglo American and BHP Billiton (+1) excel due to high CA USD, strong PDM, and stable profitability (sections 2.7, 2.6). Bottom 2: Centromin (-6) and ZCCM (-5) suffer from declines in CA USD and negative or low profitability (sections 2.3, 2.2).
From the key indicators comparison table post-nationalization or non-nationalization, it can be observed that nationalized companies develop less performance improvement than private companies. Codelco is the company that benefited from the best use of points with +2, while others have -5, -6, -3, and -4. Results are thus more variable in terms of performance improvement. Conversely, non-nationalized companies generally improve their indicators, with +0 or +1, and Freeport is the only one with +0.5. It can be interpreted that the risk-taking of private companies compels them to improve their results.
3.3 Second Table:
Specific
Comparisons (15 years after nationalization/no nationalization)
Company N/NN CA/H (USD) I/E
Codelco (1987) N 125000 0.42
ZCCM (1985) N 22222 0.25
Centromin (1990) N 40000 0.25
PDVSA (1992) N 375000 0.40
COMIBOL (1968) N 18182 0.40
BHP Billiton (1986) NN 142857 0.50
Anglo American (2006) NN 200000 0.83
Freeport (1986) NN 125000 0.40
Rio Tinto (1986) NN 112500 0.48
Newmont (1986) NN 133333 0.50
3.3.1 Commentary
Non-nationalized companies (e.g., Anglo American: 200,000 USD/H, I/E 0.83) have better operational efficiency (CA/H) and finance more of their investments with equity (I/E). PDVSA (375,000 USD/H) is an exception among nationalized companies, but its I/E (0.40) remains lower than that of private companies. ZCCM and COMIBOL show the lowest CA/H (22,222 and 18,182 USD/H), reflecting low productivity.
3.4 Third Table: Synthetic Comparison (15 years after nationalization/no nationalization)
3.4.1 Commentary
Non-nationalized companies show a higher average CA/H (142,738 USD vs. 116,081 USD), indicating better productivity. Their average I/E (0.54 vs. 0.34) shows less reliance on debt to finance investments, enhancing financial stability (section 5). Additionally, their revenue is generated from other markets, and they benefit little or not at all from state contract support. Their profitability over time evolves better than that of nationalized companies.
4 Evolution of Indicators (Before and After Nationalization)
Nationalized companies (sections 2.12.5) show increased state ownership and public revenues but reduced initial profitability (e.g., ZCCM: -5% in 1985). Codelco and PDVSA stabilize in the long term. Non-nationalized companies (sections 2.62.10) maintain stable profitability (e.g., Anglo American: 20% in 2006) due to financial flexibility but limit local benefits.
5 Conclusion
Nationalizations strengthen state control but often reduce profitability (section 2.2). Private companies maintain high profitability (section 2.7) but limit local benefits. The ranking (section 3.1) and ratios (sections 3.23.3) show that non-nationalized companies are more efficient (mean CA/H: 142,738 USD; mean I/E: 0.54).
In other words, a model that includes risk-taking is essential for maximizing the efficiency and overall performance of a mining company. Multi-objective goals, sometimes contradictory (profitability, social impact), and governance issues tend to reduce overall performance.
5.1 Optimal Efficiency Model: Hybrid Mining Efficiency Model (HMEM)
Based on observations (section 1.1):
• Hybrid Governance: Combine state control (2040% shares) with private management to balance sovereignty and efficiency (inspired by Freeport, section 2.8).
• Targeted Investment: I/E > 0.5, like Anglo American, to limit debt dependency (section 2.7).
• High Productivity: Aim for CA/H > 140,000 USD, like BHP Billiton (section 2.6).
• Rigorous Management: Avoid profitability losses (e.g., ZCCM, section 2.2) through professional governance.
Model equation: The Hybrid Mining Efficiency Model (HMEM) is defined as:
where the weights (0.4, 0.3, 0.2, 0.1) reflect the relative importance of the indicators, based on section 3. An HMEM > 1 indicates optimal performance.
Example: Anglo American (CA/H = 200,000, I/E = 0.83, State Shares = 0, R = 20) yields HMEM = 1.48, confirming its efficiency.
6 Limitations
• Estimated data for some historical periods.
• Structural differences between countries.
• Exchange rate: 1 USD = 0.92 EUR (historical average).
• Consideration of management and governance issues.
• Consideration of multi-factors (management, finance, monetary).
7 Sources
• Annual reports of companies (Codelco, BHP Billiton, PDVSA, Anglo American, Freeport-McMoRan, Rio Tinto, Newmont).
• World Bank: Economic data by country.
• IMF: Sectoral reports.
• Limpitlaw, D. (2011). Nationalization and mining: lessons from Zambia. J. S. Afr. Inst. Min. Metall.
• Lagos, G. (2018). Mining nationalization and privatization in Peru and Chile. Mineral Economics.
• Contreras, M. (1993). The Bolivian tin mining industry in the first half of the 20th century. Institute of Latin American Studies.
8 Annexes
• Indicator evolution tables (19372006): See section 2.
• Ratio calculations:
– CA/H: CA USD divided by H. E.g., Codelco (1987): 2,500,000,000 / 20,000 = 125,000 USD.
– I/E: I divided by E. E.g., Codelco (1987): 500,000,000 / 1,200,000,000 = 0.42.
– CA/H mean (N): (125,000 + 22,222 + 40,000 + 375,000 + 18,182) / 5 = 116,081 USD.
– CA/H mean (NN): (142,857 + 200,000 + 125,000 + 112,500 + 133,333) / 5 = 142,738 USD.
– I/E mean (N): (0.42 + 0.25 + 0.25 + 0.40 + 0.40) / 5 = 0.34.
– I/E mean (NN): (0.50 + 0.83 + 0.40 + 0.48 + 0.50) / 5 = 0.54.
• Detailed Tables:
Table A.1: Codelco Key Indicators (Section 2.1)
Table A.2: ZCCM Key Indicators (Section 2.2)
Table A.3: Centromin Key Indicators (Section 2.3)
Table A.4: PDVSA Key Indicators (Section 2.4)
Table A.5: COMIBOL Key Indicators (Section 2.5)
Table A.6: BHP Billiton Key Indicators (Section 2.6)
Table A.7: Anglo American Key Indicators (Section 2.7)
Table A.8: Freeport-McMoRan Key Indicators (Section 2.8)
Table A.9: Rio Tinto Key Indicators (Section 2.9)
Table A.10: Newmont Mining Key Indicators (Section 2.10)
Table A.11: Comparison of Key Indicators (Section 3.1)
Table A.12: Specific Comparisons (Section 3.2)
Table A.13: Synthetic Comparison (Section 3.3)