Saskatchewan looking good for mining investment, annual survey reveals
The Fraser Institute Annual Survey of Mining Companies 2016 has been published, and the results have shown that Saskatchewan, Manitoba and Western Australia make up the top three jurisdictions in the world based on their attraction for minerals, metals and policy attractiveness.
The Fraser Institute Annual Survey of Mining Companies
The survey was sent to around 2,700 exploration, development and other mining-related companies around the world. Conducted from August 30 to November 18 2016, the companies that participated in the survey had an exploration spend of around $2.7billion in 2016 and $3.3billion in 2015.
The Investment Attractiveneness Index?
The Investment Attractive Index is created by pulling together the Best Practices Potential index, a rating of regions based on geological attractiveness, and the Policy Perception Index, which measures the effects of government policy on attitudes towards exploration investment.
Life at the top
As stated above, Saskatchewan sits pretty as the top jurisdiction in the world for investment. Closely behind in second place is Manitoba, a huge leap from 19th in the previous year. Western Australia drops to third, losing its top spot to Saskatchewan. Filling the rest of the top 10 are Nevada, Finland, Quebec, Arizona, Sweden, the Republic of Ireland and Queensland.
Room for improvement
Jujuy, the Argentinian province, ranks as the least attractive jurisdiction in the world for investment. That’s two consecutive years in which an Argentinian jurisdiction has found itself lurking at the bottom (La Rioja). The bottom 10, from the worst, are Neuquen, Venezuela, Chubut, Afghanistan, Mendoza, India, Zimbabwe and Mozambique.
Answer me this...
The survey questionnaire asked managers and executives to look at what can be considered as investment barriers. There were 15 factors identified in the survey, with respondents asked to indicate how each of them influenced company decisions when it came to investments:
- Uncertainty concerning the administration, interpretation, or enforcement of existing
- Uncertainty concerning environmental regulations (stability of regulations, consistency and timeliness of regulatory process, regulations not based on science);
- Regulatory duplication and inconsistencies (includes federal/provincial, federal/state, inter-departmental overlap, etc.);
- Legal system (legal processes that are fair, transparent, non-corrupt, timely, efficiently administered, etc.)
- Taxation regime (includes personal, corporate, payroll, capital, and other taxes, and complexity of tax compliance);
- Uncertainty concerning disputed land claims;
- Uncertainty concerning what areas will be protected as wilderness, parks, or archaeological sites, etc.;
- Infrastructure (includes access to roads, power availability, etc.);
- Socioeconomic agreements/community development conditions (includes local purchasing or processing requirements, or supplying social infrastructure such as schools or hospitals, etc.);
- Trade barriers (tariff and non-tariff barriers, restrictions on profit repatriation, currency restrictions, etc.);
- Political stability;
- Labor regulations/employment agreements and labor militancy/work disruptions;
- Quality of the geological database (includes quality and scale of maps, ease of access to information, etc.);
- Level of security (includes physical security due to the threat of attack by terrorists, criminals, guerrilla groups, etc.);
- Availability of labor/skills.
On a scale of one to five...
Respondents were asked to select one of the five following responses that best described each jurisdiction:
- Encourages exploration investment
- Not a deterrent to exploration investment
- Is a mild deterrent to exploration investment
- Is a strong deterrent to exploration investment
- Would not pursue exploration investment in this region due to this factor
You can read more on the survey, including the full report at: https://www.fraserinstitute.org/categories/mining
The January 2017 issue of Mining Global is live!
Get in touch with our editor Dale Benton at [email protected]
British Lithium Pressured Due To Calls for Electric Cars
The British demand for lithium is set to reach 75,000 tonnes by 2035 as the government works towards their ban on the sale of high-polluting diesel and petrol vehicles within the UK. This comes as automakers worldwide continue to insist on the benefits electric vehicles will have on slowing the rate of climate change.
It is estimated that the UK will require 50,000-60,000 MT of lithium carbonate a year by 2035 for battery production to satisfy government needs. This is assuming production remains at 1.2 million vehicles per year, and the amount of lithium required does not increase.
British Lithium, which hopes to begin constructing a quarry to produce 20,000 MT of lithium carbonate a year in a $400 million investment, are not without competitors, both within the UK and abroad.
Competition For Lithium Rises In Europe
After only five years after its initial launch, Cornish Lithium is setting its sights on becoming a UK powerhouse in mining lithium, aiming to begin commercial production in under four years. Jeremy Wrathall, a former investment banker and current managing director of Cornish Lithium, had the future in mind when founding the company.
“In 2016, I started to think about the electric vehicle revolution and what that would mean for metal demand, and I started to think about lithium,” he said in an interview with AFP. “A friend of mine mentioned lithium being identified in Cornwall, and I just wondered if that was a sort of unrecognised thing in the UK.”
Lithium was first discovered in Cornwall around 1864 and has not been mined again since 1914 when it was produced as an ingredient in fireworks. Now, however, Cornish Lithium is reportedly in the testing stage to see if the metal can be produced commercially to meet the growing demand required for the electric car sector.
Despite Cornwall’s close historic ties to mining lithium, Wrathall insists that the project is purely commercial.
Cornish Mining Revival For Lithium Production
“It’s not a mission that drives me to the point of being emotional or romantic,” he says. “It’s vitally important that we do get this technology otherwise Europe has got no lithium supply.”
The European Commission has also stated their goal to end the sale of new petrol and diesel cars by 2035 to aid the environment. That being said, the majority of lithium extraction currently relies on power provided by environmentally damaging fossil fuels─a slight contradiction.
Alex Keynes, from the Brussels-based lobby group Transport & Environment, is adamant that mining for lithium should be done sustainably.
“Our view is that medium-to-long term, the majority of materials including lithium should come from efficient and clean recycling.
“Europe from a strategic point of view should be looking at securing its own supply of lithium.”
Despite growing competition from abroad, British Lithium Chairman, Roderick Smith, continues to place importance on the mining of lithium within the UK.
“Imagine what the UK economy would look like if we lost our automotive industry,” Smith says. “The stakes are high for the UK.”
Smith expects the UK to compete with other European countries to secure a lithium battery plant in the near future.