Africa as a whole doesn’t seem to be making much progress in creating a more attractive mining investment environment.[hidepost=9][/hidepost]
This, according to the Fraser Institute’s Survey of Mining Companies: 2010/2011. This annual survey of metal mining and exploration companies to assess how mineral endowments and public policy factors such as taxation and regulation affect exploration investment. Survey results represent the opinions of executives and exploration managers in mining and mining consulting companies operating in 79 jurisdictions around the world.
“While geologic and economic evaluations are always requirements for exploration, in today’s globally competitive economy where mining companies may be examining properties located on different continents, a region’s policy climate has taken on increased importance in attracting and winning investment,” says the report.
The survey’s Policy Potential Index (PPI) is a composite index that measures the effects on 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; socio-economic agreements; political stability; labour issues; geological database; and security. The PPI is based on ranks and calculated so that the maximum scores would be 100.
In this year’s survey, Alberta surpassed Quebec as the world’s most attractive jurisdiction for mineral exploration and development.
This is how African countries performed out of a total of 79 jurisdictions surveyed:
Overall position: 14
2. Burkina Faso
Overall position: 24
Overall position: 29
Overall position: 30
Overall position: 43
Overall position: 47
7. Guinea (Conakry)
Overall position: 51
Overall position: 57
Overall position: 61
10. South Africa
Overall position: 67
Overall position: 71
Overall position: 73
Overall position: 77
“Africa’s average score has not improved in the last four years. The African average went down to 40.5 from 41.8. However, Botswana continues to perform strongly. Its score went up to 74 this year from 66.5 last year. Namibia has also made good progress in this year’s survey, moving up to 57.9 from 49.2 last year. DRC (Congo) continues its decline down to 7.8 from 18.9 last year. This drop likely reflects the uncertainty created by the nationalisation and revision of contracts by the Kabila government,” states the report.
The report also features quotes from mining executives; they had the following to say about Africa:
“Zimbabwe has a horrible political situation and limited resources available. Madagascar isn’t too far behind – another day, another coup – but they have some really interesting potential deposits.” – Consulting company, Company president
“Burkina Faso is now one of the most attractive countries for gold mining and exploration in the world.” – Producer company with more than US$50 million revenue, Manager
“In the Democratic Republic of Congo, overnight you can lose your rights in a completely arbitrary or generally corrupt environment.” – Exploration company, Company president
“In Tanzania, you’re first in the queue to submit your licence renewal. On time, on date. Next thing you know, you’re informed that someone submitted an application for the same ground before you. You wonder who this mystery, invisible person was because you really were first in the queue!” – Exploration company, Director & CO
“Botswana is pro-mining and has efficient bureaucrats, no corruption, reasonable and consistent regulations, and reasonable taxation. It has remained constant as other traditional mining friendly areas have moved away from supporting mining or simply become stupid.” – Producer company with more than US$50 million revenue, Manager