Botswana retains top ranking in mining
Brian Benza | Friday March 7, 2014 16:13
This is the eighth year in a row that Botswana has enjoyed the honours, placing the country ahead of more advanced economies such as Portugal, Spain, Russia and most of the American states.
The key policy factors include administration of current regulations, environmental regulations, regulatory duplication, the legal system taxation regime, uncertainty concerning protected areas, disputed land claims and infrastructure.
According to the authoritative survey, Botswana is again the highest ranked jurisdiction in Africa, ranked 25th of 112 in 2013 from 17th of 96 in 2012/2013. However Botswana scored low on the Policy Perception Index (PPI) reflecting deterioration in the ratings for nearly all policy factors, most notably for regulatory duplication and inconsistencies that decreased by 23 percentage points.
Other factors that slid down the ranking include uncertainty concerning the administration, interpretation, or enforcement of existing regulations (-21 points), taxation regime (-20 points), and uncertainty concerning disputed land claims (-20 points).
The survey was conducted between September and December, with responses received from 690 companies that together spent about $3.4bn on exploration.
An overall index is produced from the scores and subsequent rankings compiled from the survey responses to the policy attractiveness factors that affect investment decisions.
Policy attractiveness refers to issues such as certainty about regulations, the legal and taxation regime, land claims and infrastructure. It is an attempt by the Canada-based think-tank, to find out how mineral endowments and government policies affect mining companies’ investments in exploration. It is regarded as a good reflection of foreign investor perceptions.
In terms of countries, Botswana was the seventh most preferred mining address in the world, behind countries such as New Zealand, Finland, Sweden, France, Norway and Greenland. When provinces and other territories were included, Botswana was 25th in the world, the same position it occupied in the 2012-2013 surveys. In Africa, Tanzania saw the largest improvement in Africa in both PPI and rankings; it moved up to 62nd in 2013 from 74th in 2012/2013, in part due to improvements in the ratings for political stability (increased by 9 percentage points), uncertainty concerning environmental regulations (+ 7 points), and uncertainty concerning disputed land claims (+6 points).
The top-ranked country in the world is Sweden, with a score of 95.2. South Africa’s position is close to Brazil’s, which at 39.1 is 65th out of 112.
Angola, Zimbabwe, Côte d’Ivoire and Madagascar are among the 10 lowest-ranked jurisdictions in the survey. Madagascar dropped several places because of its trade barriers and tax regime.
Since 1997, the Fraser Institute has conducted an annual survey of mining and exploration companies to assess how mineral endowments and public policy factors such as taxation and regulation affect exploration investment. Survey results now represent the opinions of executives and exploration managers in mining and mining consulting companies operating around the world.
New additions to the 2013 report include Angola, Eritrea, Ethiopia, Fiji, France, Ivory Coast, Kenya, Liberia, Malaysia, Mozambique, Myanmar, Nicaragua, Nigeria, Portugal, Saudi Arabia, Sierra Leone, Thailand, and Uruguay.