Mining Companies Rate Investment Attractiveness of Jurisdictions in North America—Who Makes the Grade?
Contact:
Laura Jones, Director of Environmental Studies
The Fraser Institute, (604) 714-4547, Email: lauraj@fraserinstitute.caRelease Date: 14 December 1998
Vancouver, BC>>> The Fraser Institute, Canada’s leading economic think tank, today released the results of its 1998/99 Survey of Mining Companies Operating in North America. In the survey, companies accounting for over US$1 billion in exploration rated the investment attractiveness of mining jurisdictions across North America.
"Exploration investment is a key indicator of the future health of the mining industry," said Laura Jones, survey coordinator and The Fraser Institute’s Director of Environmental Studies. "While many jurisdictions have favorable geology that could easily compete with other regions around the world to attract investment, unfavorable public policies increasingly threaten new exploration."
Respondents rated the attractiveness of jurisdictions across North America for exploration investment based on mineral potential, as well as public policies such as taxation, regulatory consistency, and land use policies. Rankings were expanded from last year’s Canadian survey to include seventeen American states (selected for their hard rock mining activity and/or exploration potential), Mexico, and—for comparative purposes— Chile.
North American Winners
The state of Nevada ranks highest in North America for overall investment attractiveness with a score of 81 points out of a possible 100. This top ranking is a result of the state’s high mineral potential rating (90) and its number one rating in policy (90). Ontario is the second most attractive jurisdiction, based on its top rating on the mineral potential index (100) and its sixth place on the policy potential index (75).
Surprising, both jurisdictions out-ranked third place Chile, an area recently successful at attracting large-scale international mining investment. Also placing in the top ten jurisdictions for overall investment appeal: Manitoba (55); Quebec (53); Saskatchewan (50); New Brunswick (48); Alaska (46), and Arizona (45).
North American Losers
Floundering at the other end of the scale are: British Columbia; Wisconsin, Maine, and Prince Edward Island; all rank among the least attractive investment areas in North America for new mining investment.
British Columbia’s low rating on the investment attractiveness index (3) is largely due to its abysmal performance on the policy potential index, where it received the lowest score of any jurisdiction in North America. According to one vice-president of exploration responding to the survey, "As long as I am in this position we will not spend a nickel in British Columbia until there are major changes in tax, land tenure, and permitting."
Wisconsin’s low investment attractiveness score (3) suggest the impact of that state’s moratorium on mining, and a well-publicized aversion to mining. According to the CEO of a senior company, "Wisconsin, with an excellent potential for discovery based on geological environments, has an extremely anti-mining attitude."
Maine did poorly (3) due to its low performance on the mineral potential index (6) and mediocre performance on policy (52). Other low-scoring jurisdictions include: Minnesota (8); Michigan (10); California (10), and South Dakota (11). One chairman of a junior company called California, "a total horror story," due to that state’s long permitting process.
Survey Methodology
The investment attractiveness index for North America was constructed by combining the mineral potential index (which rates regions based on geological attractiveness), and the policy potential index (a composite index that measures the effects of government policies on exploration investment). The 85 companies participating in the survey include 61 junior mining companies and 24 senior companies representing almost 50 percent of the total expenditure in Canada for gold, base metals, and diamond exploration (as estimated by Natural Resources Canada), and close to 40 percent of the exploration expenditures in the United States (as estimated by the Metals Economics Group).
Established in 1974, The Fraser Institute is an economic think-tank based in Vancouver, Canada.
Established in 1974, The Fraser Institute is an independent public policy organization based in Vancouver.
For further information:
Suzanne Walters, Director of Communications,
The Fraser Institute, (604) 714-4582,
Email suzannew@fraserinstitute.ca
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