The survey, conducted annually by the independent research organization, found that more than four out of five mining executives believe that at least 30 percent of exploration companies will be forced out of business in the current economic downturn. Of that total, two out of five respondents believe 30 percent of the world’s exploration companies will be forced out of business, with another two out of five stating that 50 percent or more of exploration companies will be forced out of business.

More than 90 percent of respondents believe the exploration and development activities of exploration companies will be curtailed, with 57 percent saying the activity will decline “a great deal.” Nearly 85 percent of respondents said that the activities of production companies will be curtailed, though only 31 percent believe that the activity of production companies will decline a great deal. This comes after years of soaring exploration and development activities, as demand for commodities and their prices rose. Almost 70 percent of survey respondents indicated that they had increased exploration and development activity over the past five years.

“Survey responses indicate this year that the mining sector expects dramatically decreased investment and exploration along with a large number of companies either reducing activity or going out of business altogether,” said Fred McMahon, coordinator of the survey and the Institute’s Director of Trade and Globalization Studies.

“All this is bad news for an economy looking forward to recovery. With large numbers of exploration companies expected to go out of business and a vast majority of companies planning to curtail exploration and development investment in 2009, the world may face a shortage of raw materials and skyrocketing commodity prices as the world economy moves past the recession and into renewed growth,” McMahon said.

The Fraser Institute’s Survey of Mining Companies: 2008/2009 represents the opinions of 658 mining executives and managers worldwide on the policy and mineral endowment of 71 jurisdictions on all continents except Antarctica. Companies participating in the survey reported exploration spending of US$3.4 billion in 2008 and of US$3.02 billion in 2007. The complete survey is available at www.fraseramerica.org.

Despite the overall gloom, industry executives see little change among U.S. states in terms of policies that encourage mineral exploration and development.

Wyoming is the highest ranked state, moving up to the No. 2 spot in the world from No. 8 spot last year, while perennial favorite Nevada dropped from second spot to third overall. Utah dropped to 11th spot from seventh while Alaska moved up to 17th from 34th.

The majority of U.S. states rank in the middle of the pack with little movement from past years. Arizona ranked 27th, South Dakota 32nd, Idaho 36th, Minnesota 37th and Colorado is 38th. New Mexico experienced a large decline, falling from 26th to 58th.

Seven of the top 10 spots in the world went to Canadian provinces with Quebec ranked No. 1 overall for the second year in a row.

“Mining is a fully international business, and these results reinforce the idea that jurisdictions must be prepared to compete on an international basis to attract mining investment,” McMahon said.

Chile joins Wyoming and Nevada as the only other non-Canadian jurisdiction to crack the top 10, ranking in seventh place. Chile is also the highest rated Latin American nation, followed by Mexico in 28th spot and Peru in 30th.

Among Australian states, South Australia has the highest ranking at 16th, followed by the Northern Territories in 20th and Western Australia in 21st.

Botswana is the highest ranked African nation (18th), followed by Mali and Namibia in the 33rd and 34th spots, respectively.

Among those with the bottom scores are Venezuela, Ecuador, Guatemala and Honduras.