A recent study conducted by the Behre Dolbear Group, (BDG) determined that the United States remains the most difficult country to navigate the political permitting process.
BDG conducts an annual survey that advises mining investors which countries they should invest their resources. The survey rates each of the 25 selected countries in seven subject areas:
- Political Stability
- Social issues affecting mining
- Delays in receiving permits, bureaucratic and otherwise
- Government corruption
- Stability of the currency
Several countries were not included in the survey due to their governmental structure that prevents BDG from even considering recommending them for investment. Countries with large mining sectors such as Zimbabwe and Venezuela were left off the survey for this reason. No country in the Middle East was included in the 2011 survey; the increased political unrest has made these countries BDG would not recommend as an investment opportunity.
Worldwide the need for minerals is growing dramatically. Emerging nations such as China, India and Brazil are countering the stagnation of the economies in Europe and the United States resulting in an ever-increasing demand for minerals such as copper, gold and rare earth minerals. The prices of these minerals are also rising to historic levels with gold recently topping $1,500 an ounce.
Overall the United States ranked sixth highest among mining countries for investments although the risk was rated slightly higher than in 2010. Australia and Canada were determined to be the safest risks again as they were in 2010 but their risk level rose dramatically attributed in most part to their countries economic downturn and their tax policies.
Those countries that were rated higher than the United States are in order:
The countries that rated lowest on the survey were Russia, Bolivia and the D.R. Congo.
According to the survey report, permitting delays caused by bureaucracies and NIMBY issues are a worldwide problem but the U.S. still rates at the bottom of this category. In the countries surveyed there was an overall average of 6.5 years for an investor to see a return on their mining investment. In the United States the average investor will not see a return for up to 10 years as it takes seven to 10 years for an average development to begin. Permitting delays in the United States are rated as the most significant risk factor when considering mining investment in the country.
The report also predicted as we move forward that those companies willing to take a more aggressive stand to combat the NIMBY’s and other mining opponents on social and environmental issues are the companies that will have a higher guarantee of success.
A link to the survey http://www.dolbear.com/announcements/asdf
Christopher Hopkins is senior vice president for aggregates and mining for The Saint Consulting Group, email email@example.com, phone 615 656 3794