In Fraser Institute’s Survey of Mining Companies: 2010-2011 released earlier this month Argentina is ranked 61 among the 79 best jurisdictions in the world for mining investment in terms of the overall policy potential index (PPI). The survey is based on the opinions of mining executives representing 494 mineral exploration and development companies on the investment climate within specific areas. The PPI is a comprehensive composite index that measures the effects on exploration of government policies including uncertainty concerning the administration, interpretation, and enforcement of existing regulations; environmental regulations; regulatory duplication and inconsistencies; taxation; uncertainty concerning native land claims and protected areas; infrastructure; socioeconomic agreements; political stability; labor issues; geological database; security, reliability of legal systems; trade barriers and overall confidence.
Relative to some of its Latin American peers, Argentina placed sixth out of twelve countries represented in the results. There is a significant differential between these jurisdictions as Chile has long been considered the only jurisdiction to consistently place inside the top 10, and Guatemala, Bolivia, Venezuela, and Honduras frequently rank within the bottom 10. Investors may take a cautionary note as average scores within Latin America have decreased slightly this year, to 31.6 from 33.4 last year. This follows a general trend from the 2006 survey, which scored most of these countries much higher with an average score of 51.2.
Policy debate in the air
Some controversy arises in Argentina from the confrontation that exists between the nation with the primary law of the provinces that form the Argentine Republic and the provincial right to regulate its natural resources. Speaking exclusively on Tuesday with Lithium Investing News, James McCann, Exploration Manager for Lithium One Inc. (CVE:LI), assured that Argentina is very much a “republic of provinces” and was quick to indicate confidence that the the Sal de Vida Lithium Project is located at “the only commercial lithium producing salar in Argentina and the source of more than 10 percent of the world’s production of lithium.” He demonstrated strong confidence that his company would not be affected by potential roadblocks facing mining exploration and development projects in the Jujuy Province.
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