Manitoba and Alberta are considered by mining executives as having the best policy environments in the world for mining investment, according to the Annual Survey of Mining Companies 2006-07, released today by THE FRASER INSTITUTE.
Manitoba topped the survey for the first time, knocking off perennial favourite, Nevada, which fell to number three after a six-year run on top. Alberta retained its number two ranking for the third year in a row. British Columbia, after years of improvement, has stalled and is the lowest ranked of the Canadian provinces.
Manitoba has long been among the top jurisdictions and its number one ranking this year is a result of having clear, consistent policies that are applied evenly and fairly over the long term, said Fred McMahon, co-ordinator of the survey and the Institutes director of trade and globalization studies. Our experience with the survey has shown that above all, mineral exploration companies value stability and certainty when it comes to government policy.
Other jurisdictions rounding out the Top 10 are Utah, South Australia, New Brunswick, Quebec, Queensland, Tasmania, and Saskatchewan. Six of these jurisdictions were in the top 10 last year and only one, Queensland, was not in the top 20 last year.
The big international news in the survey is that Chile has for the first time fallen out of the top 10 policy jurisdictions, dropping all the way to 27th.
The Fraser Institutes annual survey asks mining company executives to provide opinions about the investment attractiveness of 65 jurisdictions around the world on every continent except Antarctica, including sub-national jurisdictions in Canada, Australia, and the United States. This year, Colombia was added to the survey.
The overall rankings are based on the surveys Policy Potential Index, a composite index that measures the effects on mining exploration of government policies including uncertainty concerning the administration, interpretation, and enforcement of existing regulations; environmental regulations; regulatory duplication and inconsistencies; taxation; uncertainty concerning native land claims and protected areas; infrastructure; socioeconomic agreements; political stability; labour issues; geological database; and security.
The bottom-ranked jurisdiction was Zimbabwe, with the second-lowest score ever recorded in the Policy Potential Index. Other low-ranking scorers were Venezuela, Bolivia, Mongolia, the Philippines, Papua New Guinea, Kazakhstan, Russia, DRC Congo, and Indonesia.
THE CANADIAN PICTURE
This years report represents the first time since the 2001-02 survey that British Columbia has not marked an improvement in its ranking. Its ranking of 30th overall is down from the 23rd place it scored in 2005-06. This makes British Columbia the lowest ranked of the Canadian provinces, although it is still ranked above the Northwest Territories and Nunavut. However, its worth noting that Nunavut improved its ranking to 39th from 53rd and the Northwest Territories rose to 41st from 52nd.
The Atlantic provinces also showed significant upward movement, with New Brunswick moving to sixth overall from 18th, Nova Scotia improving to 17th from 35th and Newfoundland and Labrador rising to 22nd from 39th. The Yukon was the lone other Canadian territory to improve, rising to 11th from 21st last year.
The remaining Canadian provinces all saw their rankings decrease. Although they remain in the top 10 overall, Quebec fell to seventh from fifth while Saskatchewan dropped to 10th from seventh. Ontario fell out of the top 10 altogether, dropping to 20th from ninth last year.
The major movement in the top 10 shows three Australian jurisdictions moving upward - South Australia, Queensland, and Tasmania, supplanting Ontario, Mexico and Chile, McMahon said. The rise of Australia again reinforces how jurisdictions must be prepared to compete on an international basis to attract mining investment.
SIGNIFICANT INTERNATIONAL DEVELOPMENTS
The main international development in this years survey is the significant decline of Chile in various rankings, as reflected in its drop to 27th after ranking third last year. Most worryingly, of the 12 policy areas examined in the survey, Chile suffered its biggest declines in the areas of political stability and security.
The many negative responses towards Mongolia highlight problems in that country as its ranking plummeted to 62nd from 33rd last year. As the president of one producer company put it, Mongolia has literally overnight changed policy from one of openness to one that heavily penalizes foreign-owned mines.
The report may be read in its entirety at www.FraserInstitute.ca; click on the Publications link.