NEWS RELEASE : Survey shows global mining industry optimistic towards new investment while Australia recovers in global rankings

The Fraser Institute is a conservative think tank based in Canada that espouses free market principles. Its stated mandate is to advocate for freedom and competitive markets. – (Wiki). Click here for: The Fraser Institute’s Survey of Mining Companies.

March 3, 2011

TORONTO, CANADA–The worldwide economic turnaround has created optimism in the mining sector, with the global mining industry primed for new exploration and investment in 2011, according to the Survey of Mining Companies 2010/2011, released today by the Fraser Institute, Canada’s leading public policy think-tank.

More than three quarters of survey respondents said they expected to increase their exploration budgets in 2011, as detailed in the annual global survey of the world’s best places for mineral exploration and development.

The survey also shows that Australia has regained the confidence of the mining industry after taking a hard hit in the special Survey of Mining Companies: 2010 Mid-Year Update, following the Australian government’s plan to impose a heavy Resources Super Profits Tax (RSPT) on the mining industry.

“The Australian government has since announced it would back away from the proposed tax, earning a positive reaction and improved rankings from the global mining industry,” said Fred McMahon, coordinator of the survey and the Institute’s vice-president of international policy research.

The Fraser Institute’s Survey of Mining Companies: 2010/2011 is based on the opinions of mining executives representing 494 mineral exploration and development companies on the investment climate of 79 jurisdictions around the world. The companies participating in the survey reported exploration spending of US$2.43 billion in 2010 and US$1.86 billion in 2009. The complete survey is available as a free PDF download at http://www.fraserinstitute.org/research-news/research/display.aspx?id=17302.

Canadian provinces occupied three of the top four rankings, with Alberta in first place, Nevada in second, Saskatchewan in third, and Quebec, which had been ranked number one for three consecutive years, falling to fourth.

Rounding out the remainder of the top 10 jurisdictions are: Finland, Utah, Sweden, Chile, Manitoba, and Wyoming. Seven of the same jurisdictions ranked among the top 10 last year; the three exceptions are Utah, which rose to sixth place from 15th; Sweden, which climbed to seventh from 12th; and Wyoming, which jumped to 10th from 13th. Chile is the only jurisdiction outside of North America that consistently ranks among the top 10.

Australian jurisdictions showed marked improvement in this year’s survey following a dismal performance in the Survey of Mining Companies: 2010 Mid-Year Update. South Australia rose to 11th place from 15th, Western Australia climbed to 17th from 28th, New South Wales jumped to 20th from 38th, the Northern Territory rose to 27th from 30th, and Queensland fell to 38th from 33rd.

The bottom 10 scores went to Indonesia, Zimbabwe, Wisconsin, Madagascar, India, Guatemala, Bolivia, Democratic Republic of Congo, Venezuela, and Honduras.

Ecuador, the Philippines, Mongolia, and California, which were among the worst-ranked jurisdictions in the 2009/2010 survey, managed to climb out of the bottom 10 this year.  

“The drop of Quebec from number one overall to fourth provides another example of how governments can damage a reputation and deter investment by increasing taxes and introducing uncertainty into the regulatory environment,” McMahon said.

In December 2009, the Quebec government tabled a bill amending the provincial mining act, then followed that up last spring with proposed tax increases.

“In order to attract investment and compete globally, governments must offer sensible, stable mining policies which, above all, uphold the rule of law and respect negotiated contracts and property rights,” McMahon said.

“Royalty increases and convoluted regulatory schemes create uncertainty in mining, which will only drive mining investment away.”

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MEDIA CONTACT:
Fred McMahon
Vice-President of International Policy Research, Fraser Institute
Tel: (416) 363-6575 ext. 226
Email: fred.mcmahon@fraserinstitute.org

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