Thursday, August 12th, 2010 - Fraser Institute
TORONTO, ONTARIO- With many governments around the globe considering new taxes and regulations on mining activity, international mining executives are looking less favourably on these formerly mining-friendly jurisdictions, according to the results of the Survey of Mining Companies: 2010 Mid-Year Update, released today by the Fraser Institute, Canada's leading public policy think-tank.

The updated survey of international mining executives, conducted between June 1 and June 30, is a follow-up to the Fraser Institute's Survey of Mining Companies: 2009/2010, released in April.

Hardest hit among jurisdictions once considered mining-friendly is Australia, which saw a dramatic decrease in its survey rankings. South Australia dropped to 15th place overall from 10th, Western Australia fell to 28th from 19th, the Northern Territory dropped to 30th from 14th, Queensland declined to 33rd from 24th, and New South Wales plummeted to 38th overall from 20th.

The updated survey results appear to reflect the mining industry's reaction to the Australian government's proposed heavy Resources Super Profits Tax (RSPT). Although the tax was cancelled after the survey was conducted, miners will still face significant tax increases.

"Despite the cancellation of the RSPT, it is unclear how the mining industry will react to new tax changes announced after the close of the survey, especially since the structure of these tax changes remains uncertain," said Fred McMahon, survey coordinator and the Institute's vice-president of international policy research.

"The results of this updated survey make one point abundantly clear: governments that change mining policies in mid-stream without consulting the industry risk driving away investment."

The Fraser Institute's Survey of Mining Companies: 2010 Mid-Year Update is based on the opinions of mining executives representing 429 mineral exploration and development companies on the investment climate of 51 jurisdictions around the world. The update was conducted following the global recovery in commodity prices and the introduction of new regulatory hurdles and taxation in many jurisdictions. The complete survey is available at www.fraserinstitute.org.

Quebec, the Canadian province which has topped the annual survey for three years running, also saw its ranking drop to third overall from first. Quebec's downgrading is likely related to increases in Quebec mining taxes that were announced by the government without consultation and proposed changes to the provincial Mining Act.

Nevada, long considered the most mining-friendly American state, saw its ranking plunge to 10th overall from third. According to survey respondents, miners were concerned about a significant new tax on miners that was proposed in a state referendum. Although the referendum petition failed, the state government did enact a one-time mining tax.

Chile, the top-ranked South American jurisdiction in sixth place, suffered a small decline, down from fifth overall. The Chilean government had proposed a new mining tax, but the legislation was defeated in the country's Congress.

Overall, the top 10 jurisdictions are Alberta, Finland, Quebec, Yukon, Saskatchewan, Chile, Newfoundland and Labrador, Botswana, Alaska, and Nevada. Seven of the jurisdictions ranked among the top 10 are the same in both the updated survey and the previously released 2009/2010 report. The three exceptions are New Brunswick, which was not included in the updated survey; Manitoba, which fell from ninth place to 11th; and South Australia, which dropped from 10th to 15th.

The bottom 10 scores went to Ecuador, Mongolia, Kazakhstan, Bolivia, Venezuela, Zimbabwe, Russia, Colorado, Indonesia, and Tasmania.

"In order to attract mining investment, jurisdictions must uphold the rule of law and respect negotiated contracts and property rights. Jurisdictions that fail to do so can not compete successfully on a global scale," McMahon said.

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Fraser Institute


The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of 75 think tanks. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research.
Fred McMahon
P: (416) 363-6575 ext. 226
W: www.fraserinstitute.org

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Fraser Global Mining Survey MinersTax Increases

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