The Policy Potential Index is a composite measurement of the effects of government mining policies on mineral exploration and development that include environmental regulations, taxation, infrastructure, political stability, uncertainty over native land claims, labour issues as well as geological attractiveness and the interpretation of existing regulations.

 

“Quebec has always been viewed in a good light by the mining industry, primarily due to its favourable geology,” said Fred McMahon, coordinator of the survey and the Institute’s Director of Trade and Globalization Studies.

 

“But Quebec’s government also provides a favourable policy environment to go along with strong mineral potential. Mining companies feel Quebec’s stable policies provide them with the certainty that reduces risk for long-term projects.

 

“Year after year, the survey bears out that above all, mineral exploration companies value stability and certainty when it comes to government policy.”

 

This year’s survey represents the opinions of 372 mining executives and managers worldwide on the policy and mineral endowment of 68 jurisdictions on all continents except Antarctica.

 

Australia, Canada and the United States are divided by their states or provinces. The companies participating in the survey reported exploration spending of $US1.48 billion in 2007 – almost 15% of total global exploration of $9.99 billion for that year.

 

The surprise showing was Finland which jumped from number 29 last year to the number three spot. Nevada has consistently remained in the top five.

 

Australian states have all gone down in ranking in this year’s survey while South Australia, Queensland and Tasmania tumbled out of their previous year’s top 10 rankings.

 

This year, South Australia ranked 15, Tasmania 20, Northern Territory 21, Western Australia 25, New South Wales 27, Victoria 28, and Queensland was last, at 29.

 

According to one exploration company staffer, New South Wales suffers from uncertainty over environmental requirements for exploration as the authorities go through changes.

 

“In this limbo period, we have been given conflicting advice which has hindered our exploration efforts,” he said.

 

Another mining company executive told MiningNews.net that “Australia [suffers from] native title [problems], bureaucratic regulatory slowness, lack of available labor, cost blow outs, [and] timeframe issues. Australian development [is] being hindered through narrow approach to environmental hurdles”

 

Other jurisdictions that made the top 10 list include – in descending rank – Alberta, Manitoba, Chile, Utah, Wyoming, Ireland and Sweden.

 

Canada’s largest mineral producer, Ontario, moved up two spots this year to number 18, however the province was routinely in the top five at the beginning of the decade.

 

Problems with Aboriginal land title, a powerful environmental movement, a controversial land-use policy in the late 1990s, low investment in geoscience initiatives and a major conflict with DeBeers over royalty payments at their Victor project near the James Bay coast, continue to keep the province out of the top 10.

 

Coming up just one spot behind Ontario, Canada’s most western province British Columbia has made tremendous strides from its doghouse position at the beginning of the decade. But mining memories run deep and many have still not forgotten the provincial government’s expropriation of the incredibly rich Windy Craggy deposit in the early 1990s.

 

Honduras, which was added to the list this year, was considered the worst country to invest in. Other countries in the bottom 10 include several major mineral producers: Zimbabwe, Ecuador, Bolivia, India, Indonesia, Mongolia, Philippines and Venezuela, all countries with considerable political instability and mineral wealth.

 

Regarding Indonesia, one exploration company manager said the country offered no security of tenure or transparency, despite its incredible exploration potential.

 

“Mining is fully international business and these results reinforce the idea that jurisdictions must be prepared to compete on an international basis to attract mining investment,” the Fraser Institute’s McMahon added.

 

The complete survey is at www.fraserinstitute.org

 

Stan Sudol is a Toronto-based executive speech writer and mining columnist.

stan.sudol@sympatico.ca

www.republicofmining.com