Source: http://www.miningweekly.com                       Date: 13 August, 2010

Mongolia remains among the 10 least unattractive places to work in, according to an update of the Fraser Institute's annual survey of mining companies. The other 9 in the bottom square are Ecuador, Kazakhstan, Bolivia, Venezuela, Zimbabwe, Russia, Colorado, Indonesia, and Tasmania.

The Canadian province of Alberta has replaced Quebec as the jurisdiction viewed as most attractive to for investment by industry executives. Unsurprisingly, Australian jurisdictions suffered the biggest drop in ranking compared with the previous survey released in mid-April, after then-Prime Minister Kevin Rudd caused an uproar in the mining industry at home and abroad with proposals in May for a 40% resources super profits tax (RSPT).

The big take-away from the updated survey is that sudden changes in mining policies, without consultation with the industry, run the risk of scaring away investors, survey coordinator Fred McMahon said on Wednesday. The question now is whether other governments will be less likely to impose big changes after watching the Australian story unfold, he said in an interview.

High commodity prices can make it tempting for governments to introduce changes that return more mining revenue to State coffers. “It is of great concern, and it will be interesting to see whether other rational jurisdictions take a lesson from Australia,” Mr. McMahon commented.

“The mining industry's response to these things will depend on, one, the magnitude – whether it's reasonable and unreasonable, and two, whether it is done in such a way as to give miners confidence in the stability of the mining regime, or whether it is done in a way that will make them very concerned about future ugly surprises down the road,” Mr. McMahon commented.

The Fraser Institute, a Canadian public policy think-tank, conducted an update to its annual survey during the month of June, “following the global recovery in commodity prices and the introduction of new regulatory hurdles and taxation in many jurisdictions”. The results are based on the opinions of mining executives representing 429 mineral exploration and development companies on the investment climate of 51 jurisdictions around the world.