Column: Energy transition story rekindles fund interest in metals
A potential return of heavyweight investment flows to the sector could be as powerful a price driver as physical supply shortages.
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On average late stage mining projects are located in regions that are less jurisdictionally safe, according to a study of Mining Intelligence data and the Fraser Institute’s Investment Attractiveness Index.
Mining Intelligence tracks several thousand properties throughout the world at various stages of development. As of May 2018 there are over 11,000 projects at the exploration stage.
As expected the number of projects at later stages decline.
The data was paired with the Fraser Institute’s 2017 annual study of Investment Attractiveness. During the study miners are polled on how friendly a jurisdiction is to mining; what are the levels of taxation and regulation? what is the quality of the infrastructure? When the study was run in 2017 the most attractive mining jurisdictions worldwide were Republic of Ireland at 84% and Finland at 89%. Ranked near the bottom were Venezuela at 36% and Bolivia at 34%.
Fraser Institutes’s Investment Attractiveness regional measure shows that early stage companies on average are operating in safer jurisdictions compared to late stage projects.
“Many companies are operating in countries where there isn’t a mining culture,” says Katja Freitag, managing director of Mining Intelligence.
“Turning a project into a mine requires a large tool kit. It’s not just grade and financing. Miners have to learn to work with local stakeholders and manage risk if they are going to be successful.”
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