Nordic Mining Seminar – PDAC 2017

Tuesday March 7

Ken Green, Senior Director, Centre for Natural Resources

The Fraser Institute

Presentation Outline

• Survey background and methodology

• Results of 2016 Survey

• Areas of weakness

• Areas of strength

• Individual policy areas

• Conclusion

Survey Background

• Rankings compiled from an anonymous annual survey of exploration, development and mining companies

– Began with North American jurisdictions in 1997

– Current survey includes 104 valid jurisdictions

– Minimum threshold of 10 responses to include results in survey report

The 2016 Survey

• Sent to 2700 executives at exploration, development, and mining consulting companies

– Asked to respond only for jurisdictions which they know

• Responses from 350 executives

• Representing US$2.7 billion in exploration spending in 2016 and US$3.2 billion in 2015

• 104 jurisdictions rated

Survey Methodology

• Survey participants in 15 policy areas

– For example, “Taxation Regime” or “Political Stability”

– Asked whether deters or encourages investment on a scale of 1-5

• Policy Perception Index

– A composite measure of all 15 policy areas that considers responses from all 5 response categories

• Standardized scores are estimated for each jurisdiction on each policy variable and then added up and normalized to a scale of 0 (worst) to 100 (best)

2016 Policy Perception Index

82

84

86

88

90

92

94

96

98

100

Norway

Finland Sweden

2016 Survey Results

• Sweden ranked 3rd (PPI 98.2), Finland 4th (PPI 97.6), and Norway 19th (PPI 89.0)

• Republic of Ireland is top-ranked jurisdiction; Saskatchewan is 2nd

• Also in the top 10 are Nevada, Manitoba, Wyoming, New Brunswick, Western Australia, and Northern Ireland

• French Guiana tops Latin America globally at 34th

place

• Botswana tops in Africa at 12th overall.

• The bottom 10: Venezuela, Afghanistan, Zimbabwe, Mongolia, Philippines, Indonesia, Chubut, South Sudan, Mendoza, Ecuador

2016 Results-Finland• Ranked 4th (PPI of 97.6)

• An increase from 5th in 2015– Largely due to the perception of the taxation

regime as a decreasing deterrent (-15%) and minor improvements in other areas, although uncertainty over protected areas was seen as more of an obstacle (+16%)

• Areas of strength include:

– Security environment

– Geological database

– Political stability

2016 Results-Norway• Ranked 19th (PPI of 89.0)

• An decline of 7 spots from 2015

– Caused by greater investment deterrents from labour regulations and employment agreements (+36%), taxation regime (+17%), and uncertainty concerning environmental regulations (+11%)

• Areas of strength include:

– Security environment

– Infrastructure

– Political stability

2016 Results-Sweden• Ranked 3rd (PPI of 98.2)

• Remained in the same spot as 2015

– Sweden had less deterrent to investment in the legal system (-18%), but worse perception of the taxation regime (+12%)

• Areas of strength include:

– Security environment

– Political stability

– Infrastructure

Relative Rank 2016

75%

80%

85%

90%

95%

100%

2012/13 2013 2014 2015 2016

Finland

Norway

Sweden

PPI 2012/13-2016

86

88

90

92

94

96

98

100

2012/13 2013 2014 2015 2016

Finland Sweden Norway

Mineral Potential

0%

20%

40%

60%

80%

100%

Encourages Investment Not a Deterrent

64th

21st 12th

Global Top 10

Individual Policy Areas

Here we look at “detriments” to mining.

So lower scores indicate

mining friendly policy.

Uncertainty over which Areas will be Protected2016

0%

10%

20%

30%

40%

50%

60%

Finland Norway Sweden

Would not Invest

Strong Deterrent

Mild Deterrent

Uncertainty Concerning Environmental Regulations2016

0%

10%

20%

30%

40%

50%

60%

Finland Norway Sweden

Would not Invest

Strong Deterrent

Mild Deterrent

Uncertainty concerning disputed land claims2016

0%

10%

20%

30%

40%

50%

60%

Finland Norway Sweden

Would not Invest

Strong Deterrent

Mild Deterrent

Taxation Regime2016

0%

10%

20%

30%

40%

50%

60%

Finland Norway Sweden

Would not Invest

Strong Deterrent

Mild Deterrent

Conclusion

• The three Nordic countries continue to have some of the most attractive policies in the world for mining investment

• Key areas for improvement are:

– Uncertainty from protected areas

– Uncertainty concerning environmental regulations

– Uncertainty concerning disputed land claims

– Taxation regime

All research available at no charge at:

www.fraserinstitute.orgThank You!

Ken Greenken.green@fraserinstitute.org

Taylor Jackson

taylor.jackson@fraserinstitute.org