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Mining investors, currently experiencing one of the industry’s worst times in over a decade, are braced for another round of disastrous results from mining companies this week, as the commodities rout takes its toll on profits.
But instead of panicking and try to “get out” of the game, mineral industry advisory firm Behre Dolbear is recommending stakeholders to focus on those markets that have been able to ride the wave relatively well so far.
In its annual ranking of countries in terms of political risks for mining investment, Behre Dolbear says among those nations the top ten are Canada, Australia, United States, Chile, Mexico, Peru, Namibia, Botswana, Colombia and Ghana, in that order:
Since 1999, the firm has annually compiled political-risk assessments in the global mining industry. Over time, Behre Dolbear says it has found a positive correlation between the growth of a nation’s wealth and the prosperity of its mining industry. “We have observed that when a country recognizes its critical need to adapt and restructure burdensome policy, it begins to optimize its economic potential,” the report says.
The 25 countries considered in this year’s survey, as in the past, were ranked based on seven criteria. Each benchmark was rated on a numeric scale that reflects the relative conditions that impact investment growth.
A score was calculated from the collective results of all seven criteria, which led to the firm’s relative rankings. The lower the numerical ranking, the lower the risk.
Regardless of the ranking, the study notes miners these days face a series of challenges to start a project, many of which did not exist ten years ago:
Today it takes six years or more until investors can expect returns from a greenfield mining construction project. It typically takes ten years to discover, define, and determine the feasibility of a project. Long lead times heighten a project’s overall risk profile, making it difficult for companies to achieve the level of return required to compete with alternative asset classes for investment. Mining companies are facing difficult challenges adapting to softening markets as their margins are squeezed and they dispose of non-core assets to conserve cash.
Behre Dolbear experts say they expect to see a prolonged market correction that will continue until supply concerns begin to influence markets.
11 Comments
Rod B
For those that are interested in a faster turn-around than that available by established mining companies, look for a group that is doing internal, or self-financed projects. The use of OPM (other people’s money), or massive amounts of borrowed money, is a good reason to avoid the company. This simple rule will eliminate 90% of the public companies.
If you are looking for alternatives – contact me.
geetha dubey
I am a women in Mining and purchased my own funds more than 200 acers minerals based land and to day it is A Grade Mines in INDIA with all infra.so far I never took any loan from the Bank, because they only give on sight L/c with city property colletral, due to this have taken help from my buyers and supplying the minerals with out free credit. but still I am struggling by Gods grace now suddenly the Indian mining terms are changed, from August 2015 no renewal for Govt.lands, lease will be given only on Auction, no any pvt application entertained.
Ours is free hold land , because of this now a days people are coming to us for showing interest to make j/v, this is the world dear.
Gene Byrge
God bless you Geetha. Continue your work
Gene Byrge
It’s all about the risk. No guts No glory.
Apple
Exploration and Mine development have huge risks without seeking additional risks just for the glory.
Why add risk ? The glory is in finding and developing a Mine, not in risking shareholders funds just for fun.
gene byrge
In the broad sense I agree with you. However if you study the history of mining, some of the fabulous discoveries have been found by explorers, who then need development money, as you point out. The risks I allude to are the same as those you refer to.
Gold mining is high risk. I have never sold stock nor do I wish to do so. I just found something really hot and now I am looking for a J.V. partner that will come take a look and see if he wants to come along for the ride. Of course he will need to be knowledgeable and possess four million to work with. So i am seeking a specific individual.
Thanks for the response and God bless
Gene Byrge
African Eagle Mines
Liberia, Africa
Apple
What about Finland, Sweden, Norway? All stable countries with strong mining history ?
Or perhaps Ireland, or Greenland (Denmark)?
I would rather put my money in any of these countries, before investing in the bottom part of the list.
Or is this just a list of where Behre Dolbear has offices ?
Karr McCurdy
Excellent point, we will take this up for consideration.
Isaya Mwaipopo
Hello Gene, I’m Tanzanian but I live in USA, I looking for a foreign partner who can invest in Tanzanite mining, I have a land which have this, please if you think you can help me to find some one who can invest in Tanzanite mining please let me know all documentation will ready for perusal by the interested one.
Adalberto Lopez
we are owners of two mines in Sonora Mexico. The location is an Hour and half south of the Arizona border. We are looking for an investor(s) to partner with us to start operations. Please let me know if you any interest to know more. Please contact me at [email protected]
andrea
Canada is love