BC Policy Attractiveness Up in Survey of Mining Companies
The Fraser Institute released its ninth annual Survey of Mining Companies in late March. For this survey, companies were asked to provide their opinions about the investment attractiveness of 64 jurisdictions around the world. 322 companies (worth a combined total of US $1.83 billion in international exploration—a third of the global total) responded, rating jurisdictions according to policy attractiveness and mineral potential.
Overall, BC ranked 14th out of 64 jurisdictions. The mineral potential index placed BC 37th of 64, up from 48th last year. For policy attractiveness, BC ranks in top half of jurisdictions rated for policy attractiveness at 23rd of 64. Until last year, BC had always been counted among the bottom 10.
Comparatively, Alberta is ranked second out of all jurisdictions for most attractive policy environment. Manitoba, Ontario, Quebec, and Saskatchewan also scored in the top 10. The three Atlantic Provinces included in the survey—New Brunswick, Newfoundland, and Nova Scotia—all suffered declines in this year’s survey, and New Brunswick’s ranking has been consistently falling. Meanwhile, the Yukon has made steady advances in the past three years, now at 21st place, while the Northwest Territories and Nunavut are ranked 52nd and 53rd on the index, respectively.
Changes in mining policy in British Columbia over the last several years have resulted in only slow changes in British Columbia’s position in the survey. The survey notes that BC’s case reflects the argument that “ miners need to be persuaded of long-term stability before placing their trust in a jurisdiction…Without stability, a good policy today may become expropriative by the time a mining company begins to make its money back.” This is a crucial element in investment attractiveness as mining companies pour time and resources into a venture long before they start to see any return on their investments. “The effects of bad policy takes years to dissipate, and governments around the world should be aware that mistakes today will haunt them in lower investment for years into the future.”
While a stable policy environment is the driving factor in encouraging mining investment in BC, a contributing factor to the rise in fortunes of the industry is the quality of BC’s geological databases, which ranked the highest out of all jurisdictions. “BC has been collecting and filing extensive geological information for a variety of purposes and one of the end results is increased investment,” said Minister of State for Mining Bill Bennett. “Although commodity prices help drive the industry boom, we hear daily that the industry also sees BC as a good place to invest because of the positive regulatory changes we’ve made and our approach to mining.”
As Fred McMahon, Director of the Fraser Institutes Centre for Trade & Globalization Studies suggests, BC may provide an object lesson: “Attractive geology is necessary, but not enough. Governments who want to maintain viable mining industries in their jurisdictions must enact favourable policies to encourage investment.”
The full survey results are available on the Fraser Institute’s website. To view the publication, visit: www.fraserinstitute.ca/shared/readmore.asp?sNav=pb&id=830