alberta mining friendly area

Fraser Institute finds Alberta still tops for mining, exploration

Canadian provinces occupied three of the top four rankings for mining exploration and investment in the latest version of the Fraser Institute's Survey of Mining Companies 2010/2011.
Author: Dorothy Kosich
Posted: Thursday , 03 Mar 2011
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RENO, NV -

Alberta is the top-ranked place in which mining and exploration companies can do business, says the latest edition of the Fraser Institute annual survey of international mining companies released Thursday.

The 2010/2011 survey of mining companies revealed that more than three quarters of survey respondents expect to increase their exploration budgets this year.

While Canadian provinces occupied three of the top four rankings, Nevada came in second, followed by Saskatchewan and Quebec, which had previously been ranked first for three consecutive years. Quebec's decline has been attributed to tax increases announced in last spring and plans to rewrite its mining act.

The Vancouver-based Fraser Institute sent surveys to 3,000 exploration, development and other mining-related companies around the world. The survey received responses from 494 of these companies.

Interestingly, no nation scored first in all categories. Chile is the only jurisdiction outside of North America that consistently ranks in the top 10, which includes Alberta, Nevada, Saskatchewan, Quebec, Finland, Utah, Sweden, Chile, Manitoba and Wyoming.

The bottom ranked jurisdictions for mining are Indonesia, Zimbabwe, Wisconsin, Madagascar, India, Guatemala, Bolivia, DRC, Venezuela and Honduras, which was the lowest ranked mining jurisdiction.

The survey respondents were also asked to rank current mineral potential assuming current regulations and land use restrictions. Chile ranked number one in the category, followed by Quebec, Saskatchewan, Nevada and Greenland. Ironically the worst jurisdictions in this category were Wisconsin, Washington State and Venezuela.

In another category which asked for ranking in terms of uncertainty concerning the administration, interpretation and enforcement of existing regulations, Chile was ranked the best, followed by Sweden, Burkina Faso, Botswana and Greenland. The worst-ranked country in this category was no surprise to Venezuela watchers, followed by Washington State, California and Wisconsin.

The survey respondents definitely expressed optimism in metals prices and regarding renewed investor interest in the mining industry. Of those surveyed, 364 companies said they expect exploration budgets to increase this year.

When asked what commodity is assigned the largest proportion of a company's budget, 43.38% of those responding favored gold, followed by 16.88% who have budgeted for copper.

Of those surveyed nearly 60% said they rated mineral potential over policy factors.

WHAT MINERS ARE SAYING

Australia

One exploration company vice president said the Australian policy environment "has clearly got a lot worse."

The CEO of another mining company declared, "Victoria is anti-development, regulation and red tape."

The manager of a consulting company called South Australia, "Pleasure to do business with. Encourages and seeks investment."

United States

"Make everyone do without any mining products for a month or a year in Wisconsin," declared a senior manager of a mining company with more than US$50 million in revenue. "Outlaw all mining materials."

Meanwhile, an exploration company president asserted, "Capricious application of midnight tax deals cost Nevada dearly and proposed changes in Chile and Peru could do the same. Nevada is going to have a long haul to convince the industry its tax and regulation is stable to regain its position of prominence."

However, an individual consultant felt that Nevada "is still encouraging the actual opening of new mines, something that is becoming extremely rare in most jurisdictions."

An exploration company president had one word for California: "Hopeless."

The president of a consulting company complained that the environment for Alaska mining has become so adversarial "there are already three law suits designed to stop a project that is still in the exploration phase."

Another consultant was fed up with the eight-month permitting procedure required to clear a 10x10 meter area of brush in the Tongass National Forest in Alaska. It eventually required the signature of the U.S. Secretary of Agriculture. "Totally absurd," the consultant said.

Nevertheless, the president of an exploration company apparently loves doing business in Utah, which offers "a strong mining history, experienced regulators with an understanding of mining, and not as much federal land as Nevada (where the uncertainties and lengthy time lines associated with permitting on federal land have led me to downgrade Nevada)."

Canadian Provinces

"British Columbia suffers from land claims issues, environmental uncertainties, permitting problems, political problems on several fronts, and a history of defaulting to a dictatorial Supreme Court," asserted an exploration company vice president.

Another exploration company veep wondered if "Saskatchewan's opposition to BHP and ultimate federal response to BHP takeover bid of Potash Corp. may impact the investment climate in Saskatchewan and Canada."

The company president of a mining company with more than US$50 million revenue called Alberta "a resource friendly government" with "good infrastructure, and generally competitive taxation."

Canadian Territorial Governments

"In the Yukon mining is the culture," declared a consulting company president.

Meanwhile, an exploration company manager complained, "The Northwest Territories has too much federal government involvement and a water board that is just totally inefficient and cannot approve anything is a reasonable timeframe."

Latin America

"Venezuela: ?Thank you for finding this valuable gold deposit. You may leave now,'" said a consultant.

The president of an exploration company called Ecuador "the best example of how to kill a mining boom." Another exploration company president accused Ecuador of creating "an overall policy which disincentivizes foreign investment in mining and exploration."

Meanwhile, an exploration company president doing business in Chile said the country "has a very responsible, pro-mining stance, and reasonable environmental regime, not likely to blow up and kill the companies working there. If Colombia continues to improve tax, royalty, etc., it will overtake Chile."

The vice president of a mining company with less than US$50 million in revenue observed that while Mexico "has a long mining tradition with governments that encourage mining; the main uncertainty is the spreading deteriorating security situation related to the drug cartel wars."

Europe

"Greece is the worst," declared an exploration company president.

"Spain is no longer an easy country for mining investments," said the vice president of a copper project in the country. "It's a headache due to bureaucrats with no understanding or experience."

Meanwhile, an individual consultant revealed," The Russian mafia has threatened people I know personally, who tried to operate in Magadan and were forced out due to death threats for refusing to deal with them."

The manager of a mining company with more than US$50 million in revenue observed, "In Ireland, if you obey the regulations, spend what you said you'd spend, and report in a timely fashion, you keep your ground. Period."

An exploration company president advised, "Finland has found a balance between the development of natural resources and the implementation of regulations designed to safeguard the environment and indigenous people."

Asia

"You can spend millions developing a property in the Philippines, only to have it swept away by peasants, lobby groups, churches. The land return system is worthless," declared the president of a mining company with less than $50 million revenue.

"Indonesia: From central governed regulations to regional governed regulations, then back to central governed regulations in 10-year period," observed a consultant.

"China no access to land for exploration; no ability to acquire tenure," said an exploration company president.

To read the Fraser Institute mining survey, visit www.fraserinstitute.org