Risky busi­ness

Finweek English Edition - - Openers - DAVID MCKAY

SOUTH AFRICA RANKS AS THE 53rd most at­trac­tive coun­try for min­ing ex­plo­ration be­hind lo­cales such as Wy­oming, Burk­ina Faso, and even the mos­quito-rid­den climes of Saskatchewan.

It seems min­ers will tol­er­ate blood-suck­ers more eas­ily than civil strife, despo­tism and war, which is quite right. That’s why Zim­babwe is, again, bot­tom rank­ing, with the Demo­cratic Repub­lic of Congo (DRC) push­ing hard for the wooden spoon. Venezuela is the sec­ond least at­trac­tive des­ti­na­tion, prov­ing again that cap­i­tal­ism and so­cial­ism don’t mix. Th­ese are some of the find­ings of the 2006/2007 Fraser In­sti­tute re­port that has, since 1997, pro­duced a score­card for gov­ern­ments show­ing how at­trac­tive their poli­cies are from the point of view of the ex­plo­ration man­ager. What’s in­ter­est­ing is how badly Africa fared.

Only Zam­bia and the DRC did bet­ter this year than last. Mali, Botswana, Burk­ina Faso, Ghana, Tan­za­nia and SA all be­came less at­trac­tive to ex­plo­ration man­agers. In the case of SA, it sank from 37th most at­trac­tive coun­try in which to in­vest in the 2005/6 re­port. But why?

The re­port asks ex­plo­ration man­agers to rank 65 coun­tries on cur­rent min­eral po­ten­tial in the con­text of the risk of na­tive land claims, reg­u­la­tory du­pli­ca­tion and ad­min­is­tra­tion, tax­a­tion, in­con­sis­tent law­mak­ing etc.

Cur­rent reg­u­la­tions, prob­a­bly those en­shrined in SA’s min­ing char­ter, are deemed to be highly unattrac­tive. How­ever, the Fraser In­sti­tute re­port says SA ranks 13th in the room-for-im­prove­ment cat­e­gory. Rus­sia tops this rank­ing; the DRC is fourth.

POL­ICY PO­TEN­TIAL IN­DEX

Source: 2006/07 Sur­vey of Min­ing Com­pa­nies

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.