Why Resource Nationalism Is a Silent Threat to Natural Resource Investors

Resource Nationalism Threatens Natural Resource Investments, Says Mackenzie VP

While the natural resources sector holds promising opportunities, investors should tread carefully amid geopolitical risks and government intervention, warns Dylan Fricker, Vice President and Portfolio Manager at Mackenzie Investments.

“There are definitely good deals in natural resource equities,” Fricker said. “But you’ve got to be alert — not just to market volatility, but also to interference from local governments.”

One of the biggest risks, he says, is resource nationalism — where governments attempt to seize greater control or profits from natural resources, especially when commodity prices rise.

“It’s not just about the asset anymore — the country where that asset is located can be equally or more important,” he explained. “Be very selective about where you’re deploying capital.”

Fricker recommends investing in companies that operate in jurisdictions with stable political and legal frameworks. “If you want gold exposure, for example, you might consider a Canadian miner like Agnico Eagle rather than a lesser-known operation in Africa,” he said.

Political and Legal Risks Can Override the Right Call

Even when investors correctly anticipate commodity trends, investments can falter if the underlying companies are located in unstable regions.

“Sometimes you’re right about the commodity but wrong about the stock — because the stock happens to operate in the wrong jurisdiction,” Fricker noted.

He cited several cases in point. In Panama, operations at Cobre Panama, a major copper mine in Colon Province, were suspended following protests and a Supreme Court decision against the company. In Guatemala, local unrest and legal disputes forced Pan American Silver to halt significant silver, gold, and other metal production at a contested mining site.

“It’s not just government greed — courts and broken dispute processes can destroy your investment overnight,” he added.

Diversification and Caution Still Rule the Game

Fricker also cautions investors against becoming overconfident during bull cycles in commodities. “It’s easy to become overweight in a hot sector, even unintentionally,” he said. “But when that sector cools, the regret can be substantial — especially if you didn’t trim your positions or take profits.”

He encourages reasonable diversification and a disciplined approach to profit-taking.

On specific commodities, Fricker holds a positive outlook on energy transition metals like copper and nickel. However, he is more skeptical about lithium, citing concerns over evolving battery technology.

“Lithium might go the way of lead-acid batteries,” he said. “I’ve read enough to be cautious — maybe don’t bet your entire portfolio on a lithium mine.”

Mixed Outlook on Energy Markets

As for fossil fuels, Fricker believes oil’s price outlook has weakened, affected by recent geopolitical tensions and U.S. tariff policies. On the other hand, he sees long-term potential for natural gas, particularly in Canada, where some of the best gas reserves globally are located.

“It’s hard to deny that natural gas will play a major role in the global energy transition,” he said. “And that’s a good story for Canadian investors.”