Canada-based research organisation the Fraser Institute has placed Zimbabwe among the world’s ten worst mining jurisdictions, according to its 2013 Mining Survey, which tallied responses from about 4 100 global mining company executives and managers.

Zimbabwe ranked 106 out of 112 for its investor attractiveness and was also near the bottom of the log in 2012, when it ranked 91 out of 96 countries.

Fraser Institute natural resources studies senior director Dr Kenneth Green tells Mining Weekly that the yearly survey, which has been conducted since 1997, considers several aspects – such as the availability of infrastructure, labour regulations, policy stability, minerals potential and socioeconomic expectations – that influence investors’ decisions on whether to invest in a mining jurisdiction.

“Zimbabwe performs much better in the infrastructure availability category than in other categories. Only 10% of the executives interviewed said they would not pursue investment in Zimbabwe as a result of the state of its infrastructure,” says Green.

He adds that 37% of respondents highlighted inadequate infrastructure as a “strong deterrent”, 30% regarded it as a mild deterrent and 23% thought Zimbabwe’s infrastructure would not deter investment.

In the category of labour regulations and employment agreements, Green notes that Zimbabwe performed poorly, as it was ranked as the fifth-worst jurisdiction.

Twenty-nine per cent of respondents stated that they would not invest in the country because of the nature of Zimbabwe’s employment agreements, while 21% highlighted this as a strong deterrent. A total of 29% regarded Zimbabwe’s employee agreements as a mild deterrent, 18% thought its labour regulations would not deter investment, while 4% said its labour regulations would encourage investment.

After South Africa, Zimbabwe has the world’s second-largest platinum reserves, which are also easier to access, as decades of mining activity in South Africa has resulted in operations having to mine deeper as the reserves have become technically more difficult to reach.

Zimbabwe also has vast deposits of gold, nickel, diamonds, coal and chrome.

Nevertheless, the Fraser Institute’s best practice mineral potential index, which measures a region’s attractiveness based on perceptions of that jurisdiction’s geology, found that Zimbabwe performed moderately poorly. The country ranked 85 out of 112 jurisdictions.

In terms of government and surrounding communities’ socioeconomic expectations of the mining industry, Zimbabwe ranked in the bottom 15. The category also reviewed how the mining industry met local purchasing and processing requirements, and the industry’s ability to supply social infrastructure such as schools and hospitals.

“Twenty-five per cent of respondents said they would not pursue investment, owing to the country’s expectations of its mining industry, while 32% highlighted this as a strong deterrent,” Green highlights.

He explains that a jurisdiction’s overall ranking in the survey is a score that weighs each index equally. “Zimbabwe consistently ranked at the bottom on each question and, on the questions of disputed land claims, trade barriers and political stability, the country falls within the bottom three, with the worst performance out of 72 countries with regard to uncertainty about disputed land claims.”

Africa’s Performance
Nine African jurisdictions made a first appearance in the Fraser Institute’s 2013 survey, with Angola ranked at 108 out of 112, Côte d’Ivoire at 105, Eritrea at 52, Ethiopia at 78, Kenya at 79, Liberia at 66, Mozambique at 76, Nigeria at 75 and Sierra Leone at 96.

Along with Zimbabwe, newcomer Côte d’Ivoire and Madagascar, which was ranked 103, were also ranked among the ten worst mining jurisdictions.

Madagascar dropped 15% in the rankings in 2012/13, as trade barriers caused respondents’ perceptions to worsen.

Meanwhile, the Democratic Republic of Congo, which was among the bottom ten in 2012, improved its policy perception index (PPI) score and ranking, moving up from 93 out of 96 in 2012 to 85 out of 112 in 2013.

Botswana was the highest-ranked jurisdiction in Africa, ranked 25 in 2013, it was ranked at 17 in 2012. It had a lower score on the PPI, reflecting a deterioration in its ratings for nearly all policy factors. Green highlights that Botswana was downgraded because of its regulatory duplication and inconsistencies, as well as uncertainty about the administration, interpretation, and enforcement of existing regulations.

The survey revealed that, in Africa, Tanzania had improved the most in both the PPI and rankings, moving up from number 74 in 2012 to number 62 in 2013.

About the Yearly Survey
The 2013 Mining Survey included responses to questions about 112 mining jurisdictions’ attractiveness. The questions were responded to by about 4 100 global mining leaders worldwide. The survey is conducted based on the view that, while mineral potential is a very important consideration in investment, the impact of government policies can be significant.

“The effects of policy on deterring exploration investment may not be immediately apparent, owing to the lag time between the implementation of policy changes and the effect this has on subsequent economic activity and job losses.

“Our purpose is to create a ‘report card’ that governments can use to improve their mining- related public policy, so as to attract investment in their mining sector and better their economic productivity and employment,” details the report.