Industry bodies blame policy for Australia’s fall in mining investment survey

JOHANNESBURG (miningweekly.com) – Western Australia, South Australia, Queensland, the Northern Territory and Victoria fell in mineral investment attractiveness, according to the Fraser Institute’s ‘Annual Survey of Mining Companies for 2017’.

Western Australia fell for the third year dropping from first in 2015 to third in 2016 to now fifth place on the investment attractiveness index. Over the last year, South Australia slipped back by one place to fourteenth, Queensland fell to twelfth, and the Northern Territory fell seven places to twenty-seventh.  Victoria dropped 14 places to seventy-first in the world. 

New South Wales and Tasmania improved their rankings, and are considered the forty-sixth and fiftieth most attractive jurisdictions for mining investments.

Western Australia’s decline was driven by the policy perception index decreasing from ninth in 2016 to seventeenth in 2017.  This reflected increased concern over political stability, socioeconomic agreements/community development conditions, and the taxation/royalty regime.

The Northern Territory also has had a large decline in the policy perception index score and rank, shifting to thirty-third, out of 91 jurisdictions, from twenty-second, out of 104 last year. Respondents rated the legal system, infrastructure, and the availability of labour as deterrents to investment.

“The Fraser Institute Survey results reflect increased red tape, proposed royalty increases and regulatory uncertainty across Australia,” said Association of Mining and Exploration Companies CEO Warren Pearce.

“The geology has not changed, but governments are damaging our investment attractiveness.”

“Tasmania and Victoria were the worst performing Australian jurisdictions at 50 and 71 respectively, on the investment attractiveness index.

“Today’s report highlights that Australia’s mining and mineral exploration industry is not immune to the negative impact of regulatory and public policy uncertainty. Ultimately, if processes are duplicative, costly and slow, companies will invest in competing jurisdictions,” Pearce said.

Queensland Resources Council CEO Ian Macfarlane said the clear message is that global investors have marked Queensland down because of policy uncertainty.

“Investors don’t like surprises, which is why the sector is always talking about the need for policy certainty”, said Macfarlane.

“The Queensland government needs to be aware investors are watching every potential change in policy as having a direct impact on the investment profile of the state.

“The clear challenge in the year ahead is to deliver policy certainty that investors expect. A stable regulatory environment is the only way to see Queensland recognised as the best mining jurisdiction in the world."

Macfarlane noted that Queensland had leapfrogged Western Australia to become Australia’s most geologically prospective jurisdiction.

“Queensland’s geological assets are globally well known, with one of the richest and diverse mineral provinces in the world, including the North West Minerals province, bauxite across Cape York and some of the best quality coal,” Macfarlane said.

“We have the geology the world wants, investors just need to see a steady hand on the policy lever.”