New Brunswick’s the top spot for mining: Fraser Institute

New Brunswick is viewed as the world’s most attractive jurisdiction for mineral exploration and development, unseating last year’s winner, Alberta, which fell to third place behind Finland, the Fraser Institute has found in its annual survey of miners. 

The latest Survey of Mining Companies compiled interviews of mining executives representing 802 exploration and development companies on the investment climate of 93 jurisdictions worldwide. 

New Brunswick was ranked as the best spot, rising from twenty-third place last year as respondents applauded the province’s efficient legal system and consistency in enforcing environmental regulations, says Fred McMahon, Fraser Institute’s vice-president of international policy research and survey coordinator. 

McMahon adds that New Brunswick’s competitive tax regime and reduced uncertainty surrounding disputed land claims also helped it snatch first place — a spot that Quebec had from 2007–2010, before falling to fourth last year, and now to fifth as miners express concerns over proposed changes to the province’s mining act and royalty increases.

This year Manitoba’s reputation took a hit, tumbling to twentieth place from ninth as executives noted that the province’s mishandled First Nations consultations caused delays in processing permits and licences.

While Saskatchewan slipped from third to sixth place, the Yukon moved up five spots to tenth to become the fifth Canadian jurisdiction in the top-10 Policy Potential Index. 

Worldwide, the best-ranked jurisdictions are, in descending order: New Brunswick, Finland, Alberta, Wyoming, Quebec, Saskatchewan, Sweden, Nevada, Ireland and the Yukon. Seven of these made the top-10 list last year, while newcomers are New Brunswick, Ireland (which climbed to ninth from sixteenth) and the Yukon. Last year’s top-10 finalists  Manitoba, Utah (down to twenty-first from sixth) and Chile (falling to eighteenth from eighth) dropped off the list altogether.

This year’s worst-ranked jurisdictions for mining investments are Vietnam, Indonesia, Ecuador, Kyrgyzstan, the Philippines, India, Venezuela, Bolivia, Guatemala and Honduras.

The Democratic Republic of the Congo, Madagascar and Zimbabwe, which made the bottom 10 last year, ranked slightly better this year on the index. However when asked about corruption, those three were believed to be among the most corrupt nations, with India, the Philippines, and Indonesia taking the dubious distinction as most corrupt. 

The question about corruption is new to the survey, and surprisingly, respondents thought Chile and Botswana had the lowest level of corruption among developing nations, ranking even better than four Canadian provinces — Quebec, Manitoba, B.C., Alberta — and two U.S. states — Montana and Washington. 

Among developed nations or jurisdictions, Spain and Poland are perceived to have the relatively highest level of corruption, followed by Nunavut and the Northwest Territories. 

Saskatchewan is the only Canadian province listed in the top-10 least corrupt jurisdictions, with Sweden, Norway and Finland in the lead.

The report notes that miners are somewhat bearish on future commodity prices, saying they expect the same or reduced prices for silver, copper, diamonds, coal, zinc, nickel, potash and platinum. Gold was the only exception, with a majority of executives predicting higher prices for the yellow metal. 

The pessimistic mood has also dampened the respondents’ investment plans. This year, 68% of those surveyed said they plan to spend more on exploration, compared to the 82% last year.

In 2011, the companies that participated in the survey reported spending US$6.3 billion on exploration, up from the US$4.5 billion spent in 2010.

“The key to establishing a positive investment climate is for governments to have a clear, sensible vision for mining policy, and to stick to it,” McMahon concludes.