For the past few years African countries exporting mining products were in a good bargaining position, due to a strong world demand and high prices. This has recently changed due to the world recession and declining commodity prices. The shift places big western companies in a better bargaining position, which is in general terms nothing to worry about, as it reflects the rule of a free market economy.

However, those big players tend to overstep the mark if the African continent becomes desperate for income in times of world crisis. Many countries want to cash-in quickly on deals, they tend to undersell their treasures to the western companies contracting them for many years.

As a new entrant to the mining industry Eritrea should act wisely and assure that it gets a fair deal with the western companies (capitaleritrea article). Many African countries have been exploited in the history and the wealth has hardly benefited the origin of  the natural resources, speaking of  the country and the people. There are many examples, such as Nigeria, Kongo and many more who can serve as proof that foreign companies are only aiming for profit maximisation, but hardly for sustainable trade with the host country. This is exactly what African countries try to avoid by consolidating their efforts to put pressure on multinational companies and investors. Read more from the Business Daily.

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