Episode: 2
Sitting on a Gold Mine

Premiered on: 09 February 2013 01:30 GMT

China’s insatiable appetite for resources and the impact this has had on the prices for raw material has produced a boom for commodity-rich countries such as Brazil, Russia and many African nations.

We meet some ultra-wealthy commodities magnates such as Wale Tinubu and Bernado Paz who have benefitted, and pose the question: can they avoid the commodities curse?

Facts and Figures

The rise of commodity based wealth

The number of Ultra High Net Worth Individuals who made their wealth from commodity-based businesses

See the full Infographic

Featured article

Sitting on a Gold Mine

Since the late 1990s the prices of many raw materials have risen exponentially. According to Credit Suisse bank, despite the 2008-9 downturn, in dollar prices, “Oil, iron ore and gold prices are currently around the highest level seen in the past 110 years, and are well above historical averages”. Gold, for example, reached a low of $252 in 1999 before shooting up close to the $2000 mark in recent years.

 

Oil, iron ore and gold prices are currently around the highest level seen in the past 110 years.”

Credit Suisse, 2011

The boom has been driven largely by rising demand from emerging markets as well as concerns over supply and availability. Of course it is true that long-term commodities scarcity may become a problem, but a significant cause of recent price spikes and troughs is that commodities’ supply is very inelastic. For example, it may take between 10-20 years to confirm a viable discovery of a metal like copper or iron, and an average of a further 9 years to bring production online.

This phenomenon has turbocharged the fortunes of many mining magnates in metal or oil-rich nations, as well as those of commodity speculators around the world, now able to directly trade commodities through Exchange Traded Funds. But mining is a risky business. Governments are understandably sensitive to private corporations digging up the very stuff of their nation for profit. And unlike a service or manufacturing industry, commodity-based businesses can’t be moved to avoid regulation or outright takeover.

Read the full article

About the Programme

Changing Fortunes is a co-production by D&E and Films of Record for BBC World News. To film the series we visited the home cities and workplaces of the global wealthy, with interview locations across Asia, Africa, the Americas and Europe.

The series director is the award winning filmmaker James Rogan. James’s credits include the six part documentary series Warship for Channel Five whilst his latest feature documentary Amnesty! When They Are All Free is his third for BBC Storyville. Changing Fortunes Executive Producers are Marc Heal for D&E, who originally conceived the series, and the award winning filmmaker and writer Roger Graef OBE, for Films of Record.

The series is broadcast on BBC World News at the following times:
Saturdays at 0130 and 1530 GMT
Sundays at 0930 and 2030 GMT

To find viewing times in your location please go to the BBC World News schedule page