JOHANNESBURG (miningweekly.com) – South Africa’s investment attractiveness has improved, primarily on the back of improved policy perception, the Fraser Institute’s 2018 mining survey, which was released on Friday, shows.
Fraser’s yearly survey ranks mining jurisdictions based responses from mining and exploration companies. It provides an overall investment attractiveness ranking, as well as rankings for policy perception and mineral potential.
South Africa’s overall ranking improved from 45 out of 91 in 2017 to 43 out of 83 in 2018; its policy perception rank improved from 81 out of 91 to 56 out of 83, but its mineral potential rank dipped from 21 out of 91 to 30 out of 83.
Nonetheless, the country consistently ranks among the top five African jurisdictions: second to Botswana in terms of overall attractiveness, and the Democratic Republic of Congo in terms of mineral potential. It ranks fourth behind Botswana, Namibia, and Zambia, on policy.
The country’s improvement in policy perception was in line with most African jurisdictions as the median score for Africa on policy factors increased in 2018. This was also the case for the region’s median investment attractiveness score.
Despite the improved performance, in terms of overall investment attractiveness, the Africa region ranks as the second least attractive jurisdiction for investment.
Meanwhile, commenting on South Africa’s ranking, Minerals Council South Africa CEO Roger Baxter told Mining Weekly Online that the council believes the improvement can be attributed, “almost entirely” to the shift in political leadership of the country and of the industry in 2018.
“Minister [Gwede] Mantashe’s management and consultative style in respect of the Mining Charter and the amendments to the Minerals and Petroleum Resources Development Act provided practical evidence of what the change in departmental leadership means to investors,” he added.
This is affirmed by the report’s comment that South Africa’s increase in ranking was partially as a result of miners expressing less concern over the taxation regime and regulatory duplication and inconsistencies.
Baxter added that South Africa’s shift from the bottom to just below middle ranking is a “profoundly important improvement”; however, the Minerals Council believes there remains significant scope for further improvement in the country’s ranking in future years.
The top jurisdiction globally for investment is Nevada, which moved up from third place in 2017. Western Australia moved into second place after ranking fifth last year. Saskatchewan (Canada) dropped a spot to third in 2018. Quebec ranked fourth, Alaska improved from tenth in 2017 to fifth in 2018. The rest of the top ten are Chile, Utah, Arizona, Yukon, and Northwest Territories (Canada).
Venezuela ranks as the least attractive jurisdiction in the world for investment, replacing 2017’s least attractive jurisdiction, Guatemala. Other jurisdictions in the bottom ten include Neuquen (Argentina), Nicaragua, Guatemala, Panama, China, Ethiopia, Dominican Republic, La Rioja (Argentina), and Bolivia.
For the 2018 report, Fraser received sufficient data to evaluate 83 jurisdictions, compared with 91 jurisdictions in 2017, 104 in 2016, 109 in 2015, and 122 in 2014. The report states that the number of jurisdictions that can be included in the study, “tends to wax and wane as the mining sector grows or shrinks [owing] to commodity prices and sectoral factors.”