PH ties Malaysia in Bottom 2-3 of global miners’ ‘Report Card’

By Mitch R. Confesor

MANILA — The world’s top explorers of industrial and precious metals see the Philippines as tied with Malaysia in second or third to the bottom of their list of 122 areas where Honduras is the worst, specifically on how attractive the mining policies of the government are to the business sector, according to the annual survey of a Canada-based think tank for the 2014-2015 period.

But the Philippines fares better in a composite list of how attractive mining investments are in a specific area, combining government policy perception and the best practices mineral potential index, which rates regions based on their geologic attractiveness, according to the recent study of the Fraser Institute based in Vancouver, British Columbia.

In its Policy Perception Index, which it called a “report card” to governments on how attractive their mining policies have been from the point of view of an exploration manager, the Fraser survey includes data on 122 jurisdictions worldwide on every continent except Antarctica, including sub-national jurisdictions in Canada, Australia, Argentina, and the United States.

Aside from Honduras, the Philippines, and Malaysia, the other bottom dwellers are South Sudan, Zimbabwe, Sudan, Nigeria, Central African Republic, Ethiopia, and Venezuela.  In the 2013-2014 period, the bottom dwellers on government policy perception were Kyrgyzstan, Venezuela, the Philippines, La Rioja in Argentina, Angola, Mendoza in Argentina, Zimbabwe, Ivory Coast, Indonesia, and Madagascar.

Top on the new list are Ireland; Finland; Alberta in Canada; Sweden; New Brunswick, Saskatchewan, and Newfoundland & Labrador in Canada; Wyoming in the U.S.; Manitoba in Canada; and Western Australia.   In the 2013-2014 period, the top placers on government policy perception were Sweden, Finland, Alberta, Ireland, Wyoming, Western Australia, New Brunswick, Nevada in the U.S., Newfoundland & Labrador, and Norway.

On the mining attractiveness index, the Philippines slid from 61st out of 112 jurisdictions in the previous survey to 101st out of 122 jurisdictions in the new survey.  In this index, Malaysia ranks as the least attractive in the world for mining investments, dropping from 70th out of 112 previously to 122nd out of 122 this time.

“While it is useful to measure the attractiveness of a jurisdiction based on policy factors such as onerous regulations, taxation levels, the quality of infrastructure, and others, the Policy Perception Index alone does not recognize the fact that investment decisions are often sizably based on the pure mineral potential of a jurisdiction,” the Fraser study noted.

Next to Malaysia in the bottom list of mining attractiveness are Hungary, Kenya, Honduras, Solomon Islands, Egypt, Guatemala, Bulgaria, Nigeria, and Sudan, while topping the list are Finland, Saskatchewan, Nevada, Manitoba, Western Australia, Quebec in Canada, Wyoming, Newfoundland & Labrador, Yukon in Canada, and Alaska in the U.S.

The recent annual survey, conducted from 26 August to 15 November 2014, was sent to approximately 4,200 exploration, development, and other mining-related companies around the world with reported exploration spending of US$2.7 billion in 2014 and US$3.2 billion in 2013.

Study authors Kenneth Green and Taylor Jackson wrote that the survey had been an attempt to assess how mineral endowments and public policy factors such as taxation and regulatory uncertainty would affect exploration investments.

“While geologic and economic considerations are important factors in mineral exploration, a region’s policy climate is also an important investment consideration,” the Fraser authors wrote, adding that the policy perception index is composed of survey responses to policy factors that affect investment decisions.

The policy factors they examined had included uncertainty concerning the administration of current mining regulations, environmental regulations, regulatory duplication, legal system, taxation regime, uncertainty concerning protected areas and disputed land claims, infrastructure, socioeconomic and community development conditions, trade barriers, political stability, labor regulations, quality of the geological database, security, and labor and skills availability.