Alberta is now seen as the world’s most attractive jurisdiction for mineral exploration and development, ending Quebec’s three-year reign as the preferred destination for mining investment, according to the Fraser Institute’s Survey of Mining Companies: 2010 Mid-Year Update, released August 11, 2010. The updated survey of international mining executives, conducted between June 1 and June 30, was a follow-up to the institute’s Survey of Mining Companies: 2009/2010, released in April.
The survey showed Australian states experienced dramatic declines in rankings, following an Australian government proposal to impose a heavy Resources Super Profits Tax (RSPT) on the mining industry. The RSPT tax proposal was dropped after the survey was conducted and replaced by a proposal for a less onerous Mineral Resources Rent Tax; however, the survey does reveal the strength of the industry’s opposition to the RSPT. South Australia dropped from 10th place in the initial 2009/2010 survey to 15th in the mid-year update, the Northern Territory dropped from 14th to 30th, Western Australia fell from 19th to 28th, Queensland dropped from 24th to 33rd, and New South Wales fell from 20th to 38th.
“Despite the cancellation of the RSPT, it is unclear how the mining industry will react to newly announced tax changes in Australia, the structure of which is still uncertain,” Fred McMahon, coordinator of the survey and the Institute’s vice president of international policy research, said. “But the results of this updated survey make one point abundantly clear: governments that change mining policies in mid-stream without consulting the industry risk driving away investment.”
As to Quebec, McMahon said, “After ranking Quebec as the best place in the world for mining investment for three years in a row, it appears miners’ confidence in the province has been shaken by increases in mining taxes which were announced without consultation in Quebec’s spring budget.” The survey results also appear to reflect concerns about a proposed review of Quebec’s mining law and could be seen as a blow to the province’s reputation for offering stable government policies.
Overall, the top 10 jurisdictions were Alberta, Finland, Quebec, Yukon, Saskatchewan, Chile, Newfoundland and Labrador, Botswana, Alaska and Nevada. The bottom 10 scores, reading up from the bottom, went to Ecuador, Mongolia, Kazakhstan, Bolivia, Venezuela, Zimbabwe, Russia, Colorado, Indonesia and Tasmania. The Philippines, Democratic Republic of Congo and California, which were among the worst-ranked nations in the original 2009/2010 survey, managed to climb out of the bottom 10.