Policy takes toll on mining

Jo-Maré Duddy – A massive plunge in its policy perception score has cost Namibia its spot as one of the top five African countries for mining companies to invest in.

The Fraser Institute, one of the 15 foremost independent think-tanks in the world, ranked Namibia eight in Africa on its Investment Attractiveness Index 2020, released this week. In 2019, the country was the fifth most attractive choice.

Fraser’s annual survey is an attempt to assess how mineral endowments and public policy factors such as taxation and regulatory uncertainty affect exploration investment.

“The Fraser Institute’s mining survey is the most comprehensive report on government policies that either attract or discourage mining investors,” said Elmira Aliakbari, director of the Fraser Institute’s Centre for Natural Resource Studies and co-author of the report.

‘INCREASED CONCERNS’

Except for Namibia, all African countries rated by Fraser improved their policy scores from 2019 to 2020. Africa’s median score on Fraser’s Policy Perception Index (PPI) increased by almost 20 points.

“Namibia, the only African jurisdiction which did not improve its PPI score, experienced a 13-point decline in its policy score making it drop in the overall policy ranking from 14th (of 76) in 2019 to 47th (of 77) in 2020,” Fraser says in its latest Annual Survey of Mining Companies report.

Namibia scored 74.3 points on the PPI in 2020, its worst performance on the index since 2017. Botswana, top on the PPI for Africa and 15th in the world, scored 91.2 points.

According to Fraser, investors expressed “increased concerns” regarding Namibia over the availability of labour and skills, regulatory duplication and inconsistencies, as well as infrastructure.

“While geologic and economic evaluations are always requirements for exploration, in today’s globally competitive economy where mining companies may be examining properties located on different continents, a region’s policy climate has taken on increased importance in attracting and winning investment,” Fraser says.

The institute’s Best Practices Mineral Potential Index measures whether a country’s geology encourages exploration investment. Namibia scored 50 points in 2020 compared to 38.89 the year before. This rates the country 61st out of 77 worldwide, compared to 64th out of 76 in 2019.

ATTRACTIVENESS

Namibia scored 59.72 points on Fraser’s Investment Attractiveness Index, an improvement of 1.5 points from 2019. The median score for Africa on the index showed an increase of nine points in 2020.

Namibia’s global ranking is 52nd out of 77 countries. In 2019, Namibia ranked 55th out of 76 countries worldwide.

The top-ten countries in Africa on the 2020 Investment Attractiveness Index are: 1. Botswana (81.48 points); 2. Mali (76.27); 3. Ghana (71.85); 4. Guinea (65.92); 5. Mauritania (63.39); 6. Mozambique (61.24); 7. Zambia (60.83); 8. Namibia (59.72); 9. Burkina Faso (59.68); and South Africa (56.33).

In 2019, the top ten were: 1. Guinea (76.64); 2. South Africa (64.79); 3. Botswana (63.39); 4. Burkina Faso (61.19); 5. Namibia (58.22); 6. Zimbabwe (44.81); 7. Mali (39.53); 8. Democratic Republic of Congo (39.20); 9. Zambia (37.90); and 10. Tanzania (32.82).

Globally in 2020, Nevada was the most attractive jurisdiction for mining investment followed by Arizona and Saskatchewan. Venezuela was rated the worst in the world.