A report released on Monday by Ernst & Young on the issues facing miners worldwide warned of further escalation in costs of mining operations in the coming years.
The rising costs is one of the top 10 risks to miners that mining firms identified. On top of the list of risks is government taxing mining activities such as what is being done by the Australian government.
.Australia was named 7th best place in the world to do mining based on risk assessment made by 1,000 resource professionals.
Outside taxing mining mega profits, other measures tagged as resource nationalism include bans on the export of unprocessed raw materials, imposition of export levies and limits on foreign ownership of mining firms.
Clive Jones, joint managing director of Cazaly Resource in Perth, said resource nationalism is an issue not only in Australia but also other mining regions. He said Australia's introduction of the minerals resource rent tax has a knock-on effect in other countries which could follow Canberra's lead.
The survey respondents also cited as risks the global skills shortage and infrastructure access. The high cost of operations landed fourth spot, up from eighth.
"In Australia, the capacity constraint issues have been biting for longer and, combined with the softening of prices and the high Australian dollar, cost inflation is of particular concern for miners here," The Herald Sun quoted Ernst & Young Global Mining and Metals leader Mike Elliott.
He added that due to the degraded risk-reward equation, mining projects around the world have been deferred and delayed, and in some instances even withdrawn. Mr Elliott also cited the uncertainty and destruction of value caused by changes of government policy of resources-rich nations as having a major impact on mining ventures.
He said among the mining nations where the skills shortage is felt are Australia, Canada, Indonesia, Mongolia, Brazil, Chile, Peru and Mozambique.
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