JOHANNESBURG (miningweekly.com) – South Africa ranked 54th out of 93 global mining jurisdictions in this year’s 'Survey of Mining Companies', compiled by Canada’s Fraser Institute.

This compared with South Africa’s 67th place out of 79 jurisdictions last year.

South Africa’s overall score in the policy potential index, which serves as a ‘report card’ to governments on the attractiveness of their mining policies, improved to 44.5, from 23.4 in 2010/11, 26.2 in 2009/10 and 40.4 in 2008/9.

In the policy potential index, South Africa was rated below countries such as Botswana, which was the highest-ranking African country at 17th out of 93 jurisdictions, as well as Burkina Faso, Mali, Ghana, Namibia and Zambia.

However, South Africa ranked above Tanzania, Niger, Zimbabwe, the Democratic Republic of Congo (DRC) and Egypt.

Zimbabwe managed to rise from its previous position in the bottom ten and showed a significant improvement from 71st out of 79 jurisdictions last year to 74th out of 93 this year.

In the ‘mineral potential assuming current regulations and land use restrictions’ category, the mining industry executives of the 802 mining and exploration companies surveyed, rated Botswana as the jurisdiction with the highest mineral potential globally, ahead of Greenland and Canada’s Yukon, which took the second and third spots.

The next African country to follow in this category was Burkina Faso, which ranked 13th, while South Africa came in 62nd.

Further, the DRC was ranked the highest African country with regard to mineral potential assuming that its policies were based on best practices. The country achieved fourth place, followed by Ghana in 18th place. South Africa ranked 56th in this category.

When asked about the DRC’s mineral potential under current regulations, miners awarded it a score of 38. However, under a best practices regulatory regime, where managers could focus on pure mineral potential, the DCR attained 87. Thus, the country’s score in the 'room for improvement' category was quite high at 49%, positioning it fourth.

Similarly, Zimbabwe came in seventh at over 40%, while South Africa scored over 30%.

TOP AND BOTTOM

Canada’s New Brunswick scored the highest on the policy potential index, achieving 95.0. Other top-ten scorers were Finland, Alberta, Wyoming, Quebec, Saskatchewan, Sweden, Nevada, Ireland and Yukon.

All these regions were in the top ten last year, except for New Brunswick, Ireland and Yukon. Chile, Manitoba and Utah fell out of the top ten.

Chile, which has fallen to 18th, had been the only jurisdiction outside North America that had been consistently in the top 10 over the life of the survey.

The bottom ten scorers were Honduras, Guatemala, Bolivia, Venezuela, India, the Philippines, Kyrgyzstan, Ecuador, Indonesia and Vietnam.

All were in, or close to, the bottom ten last year, except for Kyrgyzstan, which fell from 39th in 2011, and Vietnam, which fell from 55th place.

This year, the Fraser Institute also included a question on corruption. The ten jurisdictions considered to be most corrupt are India, the Philippines, Indonesia, the DRC, Venezuela, Papua New Guinea, Guatemala, Honduras, Madagascar and Zimbabwe.

The least corrupt in mining executives’ estimation are Sweden, Norway, Finland, Missouri, Minnesota, Michigan, Idaho, Arizona, Saskatchewan and South Australia.

COMMODITY PRICE OUTLOOK

The Fraser Institute reported that miners appeared to be more pessimistic about future commodity prices, compared with the recent heady optimism about mining prices.

“Miners are expecting level or reduced prices for almost all the commodities we examine, which is silver, copper, diamonds, coal, zinc, nickel, potash and platinum. Prices for gold and silver were expected to fare better than other minerals,” the researchers said.

Miners were especially pessimistic about diamond prices.

Reduced optimism was also reflected in investment intentions. Last year, 82% of companies taking part in the survey expected to increase their exploration budgets in 2011. This year, 68% expected to increase their exploration budgets in 2012.

However respondents reported exploration spending of $6.3-billion in 2011, up from $4.5-billion in 2010.

The survey included data of every continent except Antarctica.
 

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