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MINING NEWS: Alaska tumbles in mining policy ranking Mining survey reflects growing uneasiness in industry about Alaska’s public policies, mixed results among Canadian jurisdictions Rose Ragsdale Mining News
Alaska would be a great place for mining companies to do business if not for the state’s increasingly onerous regulatory and fiscal policies, according to the latest results of a well-respected industry survey.
The state lost significant standing in comparison with 67 other jurisdictions around the world in the 2007-2008 Annual Survey of Metal Mining and Exploration published by the Fraser Institute in February.
“When you consider current regulations, Alaska goes down in the rankings considerably,” said Fraser Institute spokesman Fred McMahon. “Miners’ taste for Alaska has declined in the last year.
“Remember this is relative; miners are less confident of predictability and transparency of regulations in Alaska. Also, they are somewhat concerned about uncertainty regarding Native lands claims.”
In the Policy Potential Index, a composite index that measures the overall policy attractiveness of the 68 jurisdictions in the survey, Alaska dropped 20.2 points to 49.8 from 70.0 in 2005-2006.
Out of a possible 100, Quebec scored the highest with a PPI of 97 and was the leader in other categories.
In the United States, Nevada took the top spot, climbing 4.5 points to earn a PPI of 93.8. Other high PPI scorers were Finland, Alberta, Manitoba, Chile, Utah, Wyoming, Ireland, and Sweden.
Honduras, new to the survey this year, scored lowest in every category with an index of 0.0. Other jurisdictions with lowest PPI scores were Zimbabwe, Ecuador, Panama, Bolivia, India, Indonesia, Mongolia, Philippines, and Venezuela.
In other categories, Alaska fared both better and worse.
In Mineral Potential, Assuming Current Regulations/Land Use restrictions, Alaska lost much of the ground it gained last year, dropping to 60.0 to 78.0 in 2006-2007 after leaping 28 points from 50.0 in the 2005-2006 survey.
But in Policy/Mineral Potential, Assuming No Land Use Restrictions in Place and Assuming Industry “Best Practices,” Alaska scored an index of 94.0, only 3.0 points lower than its 97.0 index in the same category in 2006-2007, and 2 notches below its 96.0 rating in 2005-2006.
“Among jurisdictions assuming what miners consider best practices regulations and policies, it’s no surprise that Alaska scores very well,” McMahon said. “Last year, the state ranked No. 3 among all the jurisdictions in the survey.
“In general, Alaska hasn’t gone down so much as other jurisdictions have risen,” he added.
Yukon tops for miners in Western Canada In Canada, results were mixed with the average score of the Canadian provinces and territories declining slightly by 3.1 points.
After several years of strong improvement, British Columbia’s progress stalled out last year. However, this year it resumed its upward progress in the policy potential category, climbing to 68.8 from 60.7 last year.
Nunavut and the Northwest Territories, with PPIs of 32.6 and 49.3, respectively, lagged other Canadian jurisdictions, except for Newfoundland and Labrador.
Yukon scored ahead of Ontario, Nova Scotia and British Columbia with a PPI of 71.4.
In Policy/Mineral Potential, Assuming No Land Use Restrictions in Place and Assuming Industry “Best Practices,” British Columbia scored the highest among western Canadian jurisdictions with an index of 96.0. The Northwest Territories was a close second with 95.0 followed by Yukon Territory with 93.0. Nunavut fell to last place with an index of 88.0, down 8.1 points from 96.1 last year.
To review the full survey, visit http://www.fraserinstitute.org/COMMERCE.WEB/product_files/SurveyofMiningCompanies20072008.pdf
Fraser opens mining research center The Fraser Institute has conducted the annual survey since 1997 to assess how mineral endowments and public policy factors such as taxation and regulation affect exploration investment. This year’s results are based on responses from 372 companies that accounted for 14.8 percent of global exploration spending last year.
The Fraser Institute also recently opened a new mining research center to conduct research into major mining policy issues worldwide.
“We’ll decide our own research agenda, no one gets an advance look at our findings and all research will be independently peer reviewed, said McMahon, who is director of the new center.
He also said one project on the center’s front burner is a look at “resource curse literature,” or studies showing that the richer a jurisdiction is in natural resources, the slower its economic growth.
“We aim to look at literature and do our own empirical study, McMahon added.
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