Political risk analysis for extractive industries

Abstract

Firms with extractive businesses abroad dread political instability and sudden government switches in business agreements in the countries in which they operate. The take‐over of copper firms in Chile during the Allende administration in 1971 and the recent decision by Venezuela to reduce Reynolds Metals' equity share in a smelting operation from 50 percent to 28 percent are two examples of hundreds of such events that have determined the profitability of extractive operations over the past decade. Both the risks and opportunities for international firms seeking to produce and market raw materials or firms dependent on raw materials are heavily affected by political conditions.

Citation

Coplin, W.D. and O'Leary, M.K. (1983), "Political risk analysis for extractive industries", Planning Review, Vol. 11 No. 2, pp. 16-21. https://doi.org/10.1108/eb054016