MINING INVESTMENT
“Our company is being forced by
local governments in China to sell its mining operation to a local operator without a competitive process in place and the designated buyer will not pay fair market value for the assets and resources,” complained an exploration company president. “This will create a local monopoly and potentially cause risk from various safety perspectives to our employees.”
Company Focus By Respondent, 2012-2013
Other 8%
Consulting Company 12%
policies to formalize informal miners (Peru) and to redistribute mining royalties to the local level were considered positive by some mining companies, the Fraser Institute noted. Argentina’s mining favourability score improved significantly
with all jurisdictions except Santa Cruz improving. Nevertheless, the president of a mining producer observed, “In the last three years Argentina has gone from being a place that welcomed mining investment and protected it to one where nothing is certain, other than the country’s and province’s desires to take an ever-increasing amount of the investment returns. Inflation, currency controls, union activism, changing laws, corruption, and unwillingness to acknowledge the negative aspects of the changes has made Argentina one of the most difficult places to invest and, in fact, has plummeted from desirable to not a chance at the moment even though the mineral endowment is largely untapped and the economic benefits to the poorest regions of the country could be enormous.” Even Mexico – with a long history as a favourable mining
Producer Company (> US$50m) 20%
Exploration Company 54%
Producer Company < US$50m) 6%
Another exploration company VP said
he was weary of Mongolia’s “incessant changes to relevant laws as a knee-jerk reaction to specific instances and its desire to re-open existing agreements made in good faith.” For Kyrgyzstan, another said he considered “corrupt, inconsistent ... and prone to random policy changes.”
USA Among US states Minnesota and Michigan has the largest
decrease in their mining jurisdiction favourability ranking, while Utah and Alaska improved most. Three US states ranked in the global top 10 mining jurisdictions: Wyoming in 5th
place, Nevada in 7th to 9th place, and Utah in 10th place.
Utah saw the greatest improvement in rankings moving from 21st
due to increased survey ratings for the quality of the
... miners are pessimistic about short term commodity prices ... longer term, miners expect stable or moderate price increases
Vietnam was criticized by senior management for its “endemic corruption, highest taxes and royalties in the world, unskilled workforce, political ineptitude, and a constantly shifting and overly complex regulatory framework.”
Latin America Chile remains the top-ranked
jurisdiction in this region, although it dropped to 23rd
in the rankings.
Comments for the region showed concern for resource nationalism and mining opposition in some areas, while
68 March 2013
geological database, taxation regime, and regulatory duplication and inconsistencies. Meanwhile, an exploration company lawyer
described Colorado as possessing “world-class resources, but crippling regulations have clients not even considering investment.” Another
exploration company president
observed, “New Mexico has turned around as a place to build uranium projects. It should be noted in your study that the new government is strongly supportive of resource development. “In Nevada, the NEPA process has become relatively
streamlined allowing companies to have some certainty of what the permitting process is and achieving an outcome for a known cost and timeframe,” observed an exploration company president.
Investment Patterns Companies surveyed by the Fraser Institute reported total
exploration budgets for 2012 of US$6.2 billion, up from US$5.4 billion in 2011. The survey found only 46% of respondents plan to increase their exploration budgets in 2013; down from 68%
region – drew criticism from an exploration company president who said, “After we discovered multiple, very rich and large mineral resources in a Mexican state, we were targeted by very powerful groups. This is still ongoing, so I will not name names. These groups hired Mexican and Canadian anti-mining groups to target one of our operations. They began an extortion campaign against us and we received no help from the state government. These groups tried desperately to drive us out of the state.”
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