Nationalism on natural resources is surging, and could spell danger for commodities

Nationalism on natural resources is surging, and could spell danger for commodities

Kolwezi, DRC - The sun sets on one of the open pit copper mines at Mutanda Mining Sarl on July 6, 2016 in Kolwezi, DRC.

Countries rich in natural resources have become increasingly protectionist over the past year as Covid-19 threatened their economies, a new study has shown.

A report published Thursday by risk consultancy Verisk Maplecroft indicated that over the course of 2020, 34 countries had seen a "significant increase" in resource nationalism, with the pandemic exacerbating an existing trend toward government intervention.

Verisk Maplecroft determined that 18 of the 34 countries are dependent on the minerals or hydrocarbons they export, and predicted that the threat of isolationism would increase in the coming years as governments attempt to plug fiscal holes in the wake of the pandemic.

The mining sector will bear the brunt of new measures, according to the report, with some of the world's top producers of copper and iron ore, particularly in Africa and South America, featuring among the top 10 countries at risk.

"It is entirely understandable that governments are casting around for additional sources of revenue in these fiscally constrained times," Verisk's Hugo Brennan, Head of Mining Risk told CNBC on Friday.

"Commodity prices have enjoyed a stellar start to