In another sign that the age of neoliberal economics is ending, developing countries are going after mining giants, no longer in fear that they'll be punished by markets. In a remarkable contrast to eight years ago, when major mining companies helped drive an Australian Prime Minister from office amid cries of "sovereign risk", large mining companies are having to swallow their pride as governments of developing countries target them.
Bloomberg recently collected a number of examples where mining multinationals had to buckle to local governments, including US mining company Freeport, which was recently forced to sell a majority stake in its massive Papuan copper and gold mine to Indonesian investors. Significantly, the list includes another clash between Zambia and one of the world's worst tax dodgers, Glencore, which in 2011 was revealed to be rorting the Zambian tax system of more than US$100 million a year through transfer pricing. The Australian mining industry had repeatedly held up Zambia as a model for Australia in relation to taxation of mining companies. In August, the Glencore-owned Zambian subsidiary refused to pay higher electricity prices and threatened to fire nearly 5,000 workers, but recently caved in and agreed to pay more.