Namibia overtakes Botswana as top mining destination
Brian Benza | Friday March 13, 2015 15:48
According to the 2014 Fraser Institute Survey released this week, Botswana has slipped two places down the rankings to position 26 while Namibia has improved to 25 from 34 in 2013.
The survey, which is compiled from opinions of 4200 mining executive globally in 122 jurisdictions, is an attempt to assess how mineral endowments and public policy factors such as taxation and regulatory uncertainty affect exploration investment.
The rankings are based on an overall Investment Attractiveness Index (IAI), which is constructed by a combined assessment of a country’s mineral potential as well as its government’s policy towards mineral exploration investment.
Although Botswana overall score, measured by the Investment Attractiveness Index improved to 71.5 points from 70.3 in 2013, Namibia improvement was more distinct rising to 72.4 points last year from 63.7 points.
While Botswana is still ranked highly in terms of government policy, with its Policy Perception Index (PPI) rising to 81.38 from 74.16 in the period under review, perceptions of a fall in the geologic potential of the country pulled down the Botswana’s Mineral Potential Index (MPI) to 0.65 in 2014 from 0.68 in 2013.
On the other hand Namibia improved in both categories with its PPI rising to 75.25 from 68.33 while its MPI increased to 0.71 from 0.61 over the period.
In the last four surveys, Botswana has always led African countries, reaching its highest score of 77.6 in the 2011 survey. “Botswana’s higher score on the Policy Perception Index reflects an improvement on the ratings for nearly all policy factors, most notably for the availability of labour and skills, less uncertainty concerning the administration, interpretation, or enforcement of existing regulations, and security. In a consideration of pure mineral potential on the Investment Attractiveness Index, Namibia becomes Africa’s most attractive jurisdiction, ranking as the 25th most attractive jurisdiction in the survey,” read the report. Policy factors considered included infrastructure quality, political stability, taxation, trade barriers, labour laws and other regulatory uncertainty.
The survey was circulated electronically to over 4,200 individuals between August 26 and November 15, 2014. Survey responses have been tallied to rank provinces, states, and countries according to the extent that public policy factors encourage or discourage investment.
Total exploration budgets reported by companies participating in the mining survey were US$2.7 billion (P26 billion) in 2014 and US$3.2 billion in 2013.
The other Top 10 African countries are Zambia (66.2), Morocco (64.0), Ghana (60.4), Burkina Faso (59.1), Madagascar (57.8), Tanzania (57.6), Ivory Coast (55.3), and Democratic Republic of Congo (52.8).
No African nation made it onto the global top 20, with Sudan, Nigeria, Egypt and Kenya all in the bottom ten.
The Institute received responses from 485 explorations, development and other mining-related firms around the world, that reported total exploration spending of US$2.7bn in 2014 and US$3.2bn in 2013 (down from US$3.4bn and US$4.6bn in 2013 and 2012, under the previous survey).