The Fraser Institute has published the results of its 2020 annual survey of mining and exploration companies.
The Investment Attractiveness Index takes both mineral and policy perception into consideration. An overall Investment Attractiveness Index is constructed by combining the Best Practices Mineral Potential index, which rates regions based on their geologic attractiveness, and the Policy Perception Index, a composite index that measures the effects of government policy on attitudes toward exploration investment.
The top jurisdiction in the world for investment based on the Investment Attractiveness Index is Nevada, which moved up from third place in 2019. Arizona, which ranked ninth in 2019, moved into second place this year. Saskatchewan climbed eight spots from 11th in 2019 to third in 2020. Western Australia ranked fourth this year after topping the ranking last year, and Alaska dropped a spot from fourth in 2019 to fifth in 2020. Rounding out the top 10 are Quebec, South Australia, Newfoundland and Labrador, Idaho, and Finland.
When considering both policy and mineral potential in the Investment Attractiveness Index, Venezuela ranks as the least attractive jurisdiction in the world for investment followed by Argentina: Chubut, and Tanzania. Also, in the bottom 10 (beginning with the worst) are Indonesia, Argentina: La Rioja, Bolivia, Argentina: Mendoza, Zimbabwe, Spain, and Michigan.
The Public Perception Index (PPI) is a composite index that measures the overall policy attractiveness of the 77 jurisdictions in the survey. The index is composed of survey responses to policy factors that affect investment decisions. Respondents consistently indicate that approximately 40 per cent of their investment decision is determined by policy factors.
Policy factors examined include uncertainty concerning the administration of current regulations, environmental regulations, regulatory duplication, the legal system and taxation regime, uncertainty concerning protected areas and disputed land claims, infrastructure, socioeconomic and community development conditions, trade barriers, political stability, labour regulations, quality of the geological database, security, and labour and skills availability.
Idaho displaced Finland from the top spot this year with the highest PPI score of 100. Idaho was followed by Wyoming in the second place, which moved from 16th in the previous year. Along with Idaho and Wyoming the top 10 ranked jurisdictions are Finland, the Republic of Ireland, Nevada, Utah, Arizona, Newfoundland and Labrador, Saskatchewan, and New Mexico.
Meanwhile, the 10 least attractive jurisdictions for investment based on the PPI rankings (starting with the worst) are Venezuela, Argentina: Chubut, Zimbabwe, Bolivia, Argentina: Mendoza, Tanzania, Papua New Guinea, the Democratic Republic of Congo (DRC), Indonesia, and Argentina: La Rioja.
Chief Executive Officer of the MCA, Tania Constable, said the release of the Fraser Institute’s Annual Survey of Mining Companies has sounded the alarm on the need for policy reforms by state governments to drive greater investment in Australia’s mining industry.
“While Australia remains an attractive place to do business, the survey results show other mining regions in North America and Africa are becoming more competitive as investment destinations because of improving investor perceptions of government policy,” Ms Constable said.
“As a result, all states except New South Wales have slipped in the survey’s international rankings of regions’ investment attractiveness.”
“Urgent reforms are needed to deliver internationally competitive tax and royalty rates, faster project approvals and less regulatory duplication to attract more job-creating investment in Australia’s world-leading mining industry,” she said.
Read the full Fraser Institute Annual Survey of Mining Companies 2020 here.