[miningmx.com] — SOUTH AFRICA has slipped further in the latest ranking of countries and provinces as mining destinations in the authoritative annual survey prepared by Canada’s Fraser Institute.
The country’s poor showing is a blow to the aspirations of Mines Minister Susan Shabangu to improve South Africa’s standing.
The latest survey findings have been published just ahead of a roadshow to Canada and the United States by Shabangu and mining industry stakeholders to convince investors that “South Africa remains a good investment destination’.
On June 30 last year, Shabangu acknowledged the “profound influence’ that the Fraser survey has on investment decisions globally.
She stated one of her aims was to “improve the negative perceptions on its regulatory framework from the current Fraser Institute level of 61 out of 72 countries to feature within the top quartile by 2014′.
Shabangu was speaking at the signing of an agreement with the mining industry and organised labour as part of the process she instituted to amend the Minerals and Petroleum Resources Development Act (MPRDA) and the associated Mining Charter.
The latest result for the 2011/2010 survey released in Canada on Thursday morning revealed that South Africa had slipped once again in the rankings to stand at 67 out of 79 mining destinations assessed, compared with 61 out of 72 in the 2010/2009 survey that Shabangu had referred to.
That rating is in terms of the survey’s Policy Potential Index, which assessed mining company executives’ views on the attractiveness of the mining policies being implemented by the governments of the various destinations.
What should be of particular concern is that South Africa’s actual score in the survey of 23.4 put it only marginally ahead of Zimbabwe, which had a score of 22.4 slotting that country in at 71 as part of the bottom 10.
The Fraser survey authors pointed out that nine of the bottom 10 were “developing nations which most need the new jobs and increased prosperity that mining can bring’.
South Africa’s rating had initially improved after the introduction of the MPRDA in 2005.
The country rose to 50 out of 68 mining destinations in the 2008/2007 survey from 53 out of 65 in the 2007/2006 survey, and reached 49 out of 71 in 2009/2008.
However, it then dropped badly to 61 out of 72 in the 2010/2009 rankings.
The Policy Potential Index measures the effects on exploration of government policies on factors such as uncertainty concerning the administration, interpretation and enforcement of existing regulations, environmental regulations and uncertainty concerning native land claims and protected areas.
Four of the top 10 destinations ranked by the survey were the Canadian provinces of Alberta, Saskatchewan, Quebec and Manitoba.
Three US states – Nevada, Utah and Wyoming – also featured in the top 10 while the remaining three slots were taken by Finland, Sweden and Chile.
The findings of the survey are not universally accepted, judging by the comments of AngloGold Ashanti CEO Mark Cutifani in a debate held at the Gordon Institute of Business Science in Johannesburg on September 8.
He declared South Africa to be “in the world’s top five mining destinations’ despite the problems with the MPRDA and irrespective of its ranking on the Fraser Institute survey.
Despite this, it seems likely that Shabangu will face an uphill battle on the roadshow she is about to undertake in early March to Canada and the United States, intended to convince investors that “South Africa remains a good investment destination’.
That roadshow is taking place under the banner of the Mining Industry Growth and Development Task Team (Migdett).
That was set up two years ago by the government, the mining industry and organised labour with the aim of reforming SA’s mining sector so it could take advantage of the next commodity boom, after the country missed out so badly on the last one.
According to a press release from the department of mineral resources (DMR), one of the constraints identified by Migdett was the “negative perception of the South African mining industry in investor circles around the world”.
Said the DMR: “The roadshow is Migdett’s response to this challenge and will set the record straight.’
The latest findings of the Fraser survey are not going to help at all.
