The investment landscape for new mining ventures is worsening, according to a ranking compiled by international mining advisory Behre Dolbear. The annual ranking evaluates the economic and political factors that influence the stability of mining investments in 25 mineral-rich countries.
In the 2012 ranking, Ghana, Namibia, the Philippines, Indonesia and Zambia were the only countries to improve their overall rating. The eight best and worst performing countries remained in the exactly same positions as in the 2011 ranking. Among the countries with the best investment climate in 2012 are Australia, Canada, Chile and Brazil, but each of these countries were awarded fewer points than in 2010.
In the regional breakdown, North America, Latin America and Africa received the highest scores, while Asian countries were among the worst performers. Data from greenfield investment monitor fDi Markets shows that inflows of greenfield investments in the mining industry are considerably higher in North America, Latin America and Africa than in Asia.
“All countries can offer certain advantages, but when [judged across] a broader spectrum, it becomes clear where investments are most safe – that is, free from excessive state interference,” said Karr McCurdy, president and CEO of Behre Dolbear.
State interference is a major factor contributing to the low ranking of countries such as Russia and Kazakhstan. “In the case of Kazakhstan, the government plays a central role in the mining industry and it [intends] to keep things this way,” said Mr McCurdy.
A similar situation can be seen in Russia and experts say that the situation may deteriorate even further in the near future. According to Pavel Gagarin, chairman of the board of directors at Moscow-based investment bank Gradient Alpha Investors Group, many mining industry insiders fear that Russian state involvement in the sector will increase as a result of Vladimir Putin's recent re-election as head of state.
Russia and Kazakhstan received negative marks from Behre Dolbear for their high levels of corruption, instability of currency and delays in granting mining permits.