The Fraser Institute’s annual survey of mining companies was released in March, lauding Finland as the best and naming Indonesia the worst of examined
jurisdictions for mining investment. Since the first survey was released in 1997, the document has become essential reading for investors, policy-makers
and regulators interested in gauging the risk miners take when they operate in a chosen jurisdiction.
But just how reliable is a research report based solely on perception?
In evaluating the overall attractiveness of mining investment in a jurisdiction, respondents to the survey consider taxation, the quality of its geological
database, and uncertainty over regulations and protected areas, among other factors. In the latest edition, the institute contacted 4,100 industry
representatives directly, and several organizations distributed the survey among their members. From that pool, there were 742 respondents, most of whom
are company presidents or vice-presidents.
The results have, at times, drawn the ire of some regional organizations. Following the release of the survey in 2011, Association for Mineral Exploration
British Columbia chair Michael McPhie challenged the institute to adapt the survey to implement “real facts and data” in order to reflect the policies and
investment environment in each jurisdiction.
B.C. currently ranks 31st out of 96 jurisdictions – still in the top third but considerably lower than other Canadian regions outside of Nunavut (37th) and
the Northwest Territories (29th), despite a 50 per cent increase in exploration spending to $600 million in 2012. “This is a perception-based survey and
more facts and figures would be useful,” said Rich Coleman, B.C.’s minister of energy, mines and natural gas. In the last year, the province has invested
$7 million to improve the permitting process for mining projects. “The fact that we are seeing huge investments in mining and mineral exploration in B.C.
seems to be inconsistent with the survey result,” he said.
In an ideal world, the survey would incorporate more direct measures of policy impacts on mining investment, agreed Alana Wilson, a co-author of the survey
and a policy analyst at the Fraser Institute’s Centre for Energy and Natural Resource Studies. But the lag time between policy changes and shifts in
investment, and the paucity of investment data makes that goal difficult, if not impossible, to achieve.
“It is, however, possible to capture changes in sentiment among mining company executives in a timely manner, which is what our survey strives to do,”
Wilson said. “And based on feedback we receive from those in the mining sector, the extensive citation of our findings in the media as well as in academic
journals, and the attention that is paid to our survey by mining regulators, we believe that the survey does accurately capture the influence of various
Robert Bassett, mining team leader for Colorado-based Holland & Hart, said that for the most part, the survey is an accurate reflection of what the
mining law community experiences in practice. “It’s a reasonably reliable measure of perception, and perception is reality a lot of the time.”
He said the survey is just one of many documents he advises his clients to investigate before they consider investing in a region. Government data and
research, such as the U.S. State Department’s country commercial guides or the World Economic Forum’s global competitiveness report, are also invaluable
Another source is the Behre Dolbear Group, which produces annual rankings similar to the Fraser Institute survey based on confidential sources, public
databases and political risk assessments of key players in the industry. The main difference is that only 25 countries are represented compared to the
Fraser Institute’s 96 jurisdictions.
But, broadly speaking, the conclusions of the two groups align. In the Behre Dolbear rankings, Canada, Australia and Chile come out on top. Although the
Fraser Institute survey evaluates the provinces and territories of Canada and the states of Australia as distinct jurisdictions, almost all of these
regions rank in the top 40, and Canada has three (Alberta, New Brunswick and Yukon) in the top 10. Chile is ranked 23rd. At or close to the bottom of the
pack in both surveys are Russia, Bolivia and the Democratic Republic of the Congo.
In this year’s Fraser Institute survey, Finland topped the charts, up from number two last year. For more on Finland’s mining investment climate, see
“First place Finnish.”