South Africa: Country Improves Mining Investment Appeal
Johannesburg SA's attractiveness as a mining investment destination improved slightly in the past year compared to the previous two years but the country still ranks among the three least attractive countries in Africa for mining exploration, according to the latest Fraser Institute survey.
The institute, an independent Canadian-based research organization, annually canvasses the views of about 3000 exploration, development and other mining companies around the world. This year it received 658 responses for its 2008-09 survey, representing 24% of global non ferrous spending on exploration.
The survey's "policy potential index", which indicates to governments how attractive their policies are from the point of view of mining exploration companies, showed that the top 10 mining investment destinations in the world were all in North America, except for Chile. The 10 least attractive destinations were all developing countries, including Venezuela, India, the Democratic Republic of Congo and Zimbabwe. "Zimbabwe -- would anyone go there?" the survey quoted an executive from a $50m mining company as saying.
SA ranked 49th out of 71 countries on the policy potential index, with a score of 40,4, above last year's 34,6. It was just behind Tanzania, which scored 41,8. Zimbabwe scored 19,1 and the Congo 24,1.
Botswana remained the most attractive exploration destination in Africa for the third successive year, with a score of 64,9.
If government's land use and other policies were perfectly geared towards investment, SA would be the world's 27th most attractive destination based on mineral endowment alone, while the Congo would be even better, at 19th place.
SA's policies towards environmental regulation and its taxation regime were considered less of a deterrent to investment than uncertainty over interpretation of existing regulations, inconsistency in regulations and uncertainty over land claims.
It ranked particularly low on labor relations and security but higher on the scale on availability of geological information.
This year the institute added new questions on the fall in commodities prices. According to one respondent, "commodity prices have been ludicrously high in recent years and are now returning to something resembling sanity".
