Saturday 15th August 2020

Resource Clips

Rating the risks

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Mongolia scored highest (in this case meaning worst) for “room for improvement.” One respondent described the DRC as “corrupt beyond description and, from a mining point of view, a shambles in each and every conceivable respect.” Madagascar inspired the “great mineral assets, highly corrupt government” label.

A survey shows how miners and explorers see the world they work in

Not all companies responded uniformly. First-place Finland also rated a “horror story” from one consulting company for “taking three-plus years to issue mining exploration claims. This is an impossible environment for junior mining exploration companies to work in!”

Apart from assessing country risk, the survey addressed other topics. It found mineral explorers spent US$6.2 billion in 2012 compared with $5.4 billion in 2011. But only 46% of respondents said they plan increases for 2013, down from 68% the previous year.

The vast majority of respondents expressed pessimism about commodity prices over the next two years, predicting either increases up to a maximum 10% or outright declines. The rate of pessimism for gold and silver was much lower, however. Nearly half the respondents forecast significant price increases over the coming two years.

Not surprisingly, respondents expressed frustration with the dearth of investment. Some called for reorganization of capital markets for the benefit of explorers. Others asked how diminishing reserves will be replaced. But not all expressed pessimism. One company vice-president wrote, “We are about to experience a mining renaissance around the globe. A solution for many crisis-affected areas of the world is to permit projects expeditiously.”

Of its own work, the Fraser Institute said, “We believe that the survey captures, in broad strokes, the perceptions of those involved in both mining and the regulation of mining in the jurisdictions included in the survey.”

Download a copy of the Fraser Institute’s Survey of Mining Companies 2012/2013.

Read more about how the survey ranked Canadian jurisdictions.

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