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COMMENT
March 2017
MODERN MINING
3
I
nteresting to see that Ivory Coast has
emerged as the top mining destination in
Africa in the Fraser Institute’s Annual Sur-
vey of Mining Companies 2016 in terms
of its ‘Investment Attractiveness’. It is fol-
lowed by Botswana, Ghana, the DRC, Zambia
and Eritrea. Regrettably, South Africa comes in
at a lowly 13th in the African rankings, slipping
by two places since the previous survey in 2015
and barely beating South Sudan.
In the Fraser Institute’s own words, the
survey “is an attempt to assess how mineral
endowments and public policy factors such
as taxation and regulatory uncertainty affect
exploration investment.” An overall Investment
Attractiveness Index is constructed by combin-
ing a Best Practices Mineral Potential Index,
which rates regions based on their geologic
attractiveness, and a Policy Perception Index
(PPI), which is a composite index that measures
the effects of government policy on attitudes
towards exploration investment.
The latest report is based on 350 responses
and rates 104 mining jurisdictions around the
world, including 18 in Africa.
The survey identifies the Canadian prov-
ince of Saskatchewan as the top jurisdiction
in the world for mining investment (it has
moved up one notch since 2015) with another
Canadian province, Alberta, coming in sec-
ond and Western Australia third. Rounding
out the top ten are Nevada, Finland, Quebec,
Arizona, Sweden, the Republic of Ireland and
Queensland.
While Ivory Coast may be the top coun-
try in Africa, a glance at the full Investment
Attractiveness Index shows that it is only rated
at no 17 in the world. Still, this is a very cred-
itable showing. South Africa, by contrast, is
way down the index in seventy-fourth place
– a drop of eight places since 2015. The scale
of South Africa’s fall from favour as a mining
destination becomes apparent if one considers
that in 2002 the country was ranked 13th in the
world (although far fewer jurisdictions were
included in the survey back then).
Which are the worst mining jurisdictions in
Africa? Not surprisingly, Zimbabwe is ranked
stone last on the continent and is also in the
bottom ten measured globally, along with
Mozambique. For those wondering which
is the very worst mining jurisdiction in the
world, it is apparently the Argentinian prov-
ince of Jujuy, which – I must confess – I’ve
never heard of before.
Commenting on Africa’s showing in the lat-
est survey, the authors say that Africa’s median
score on policy factors (the Policy Perception
Index) has improved. “This was also the case
for the region’s median investment attractive-
ness score,” they continue. “Africa’s overall
attractiveness now ranks it ahead of the regions
of Oceania, Latin America and the Caribbean,
Asia and Argentina.”
Four African countries – the DRC, Ghana,
Ivory Coast and Zambia – experienced improve-
ments of over 10 points on their PPI scores, with
the DRC exhibiting the largest improvement in
Africa based on miners’ perceptions of policy.
Like South Africa, Namibia – which at one
stage was a front-runner in Africa – is slipping in
the rankings. Says the survey: “Namibia’s score
and rank deteriorated for the second straight
year. In 2014, Namibia was ranked as the 19th
most attractive jurisdiction in the world when
only policies were considered. The country fell
to 29th in 2015 and dropped again to rank 38th
this year. After this year’s decline, Namibia no
longer ranks as the second most attractive juris-
diction in Africa based on policy.”
One of the survey’s respondents, incidentally,
makes the following comment on Namibia: “A
draft policy of local ‘previously disadvantaged’
persons is being circulated. It models itself after
South Africa which has clearly failed in its
broad-based objectives. There is great danger to
all existing or new companies in Namibia.”
Of course, the question of how seriously
one should take the Fraser Institute’s findings
always crops up each year when the latest sur-
vey is published and there are those who believe
that its ratings should be taken with a pinch of
salt. Certainly, one can point to some anomalies
and I notice, for example, that Morocco, which
was the top ranking country in Africa in 2015
(based on the Investment Attractiveness Index)
does not even appear in this year’s survey.
One also has to ask whether it can really be
true that countries such as the DRC, Ethiopia
and Eritrea are better mining investment des-
tinations than South Africa, a country with a
modern infrastructure, a world-class banking
system and a depth of mining expertise prob-
ably unequalled in the world.
Nevertheless, the survey is extremely influ-
ential and one can only hope that our Minister
of Mineral Resources and his top civil servants
will study it closely and be galvanised into
action. South Africa should be rated as the top
mining country in Africa. The fact that it is
not is inexcusable and a sad reflection on the
policies – at least in respect of mining – of our
present government.
Arthur Tassell
“Africa’s overall
attractiveness
now ranks it
ahead of the
regions of
Oceania, Latin
America and the
Caribbean, Asia
and Argentina.”
Ivory Coast
and
Botswana
shine
in latest Fraser Institute survey