Botswana, Africa’s leading mining jurisdiction

The Fraser Institute has completed their survey of 742 mineral exploration and development companies to establish a list of the most favourable countries for global mining investment. 

Botswana is the highest ranked African country, ranking 17th out of 96 mining jurisdictions with respondents sighting the reasonable approval process, pro-mining culture, honesty of civil servants and favourable regulations as reasons for investing in Botswana. Completing Africa’s top three were Morocco in 25th position and Namibia in 30th. 

Mauritania saw the greatest improvement among the African countries included on the list climbing 16 positions to rank 36th as a good mining jurisdiction.

The largest African decliner was Mali which fell 37 places to 79th position; Mali has been experiencing ongoing political violence in the North of the country which has resulted in work stoppages at a number of mines. 

South Africa fell 10 positions down to 64th following industry wide illegal strikes and violence which cost the country R15.3 billion in mining output.

Zimbabwe and the Democratic Republic of Congo were the lowest ranked African mining investment destinations coming in 91st and 93rd respectively.

Concerning South Africa and Zimbabwe, an exploration company vice president commented, “Both South Africa and Zimbabwe are driving social experiments not driven by logic and economy, but by ideology. In the absence of reason, primary industries become the cash cows to fund the un-fundable. The rise of oligarchs in both countries evidences decline.”

Amongst the greatest concerns for miners investing in Africa were resource nationalism, corruption and governments which are not pro-active toward investors.

The report also noted that miners are concerned about short term commodity prices, and expressed a pessimistic view on the prices of silver, copper, diamonds, coal, zinc, nickel, potash, and platinum. Gold is the only commodity that respondents feel will show a significant increase in value in the short term. The long term view was that miners expect stable prices if not moderate increases.

Also included in the rankings for Africa were Ghana (54), Burkina Faso (55), Zambia (59), Egypt (69), Niger (70), Tanzania (74), Guinea (76) and Madagascar (85).

The survey was conducted from 9 October 2012 to 6 January 2013 and included exploration companies with expenditures of over $6.2 billion in 2012.