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Summary
- Australia featured on the list of the most attractive regions in the world for mining investment.
- US state Nevada showed a tremendous improvement and bagged the top position in the 2020 Investment Attractiveness Index.
- The Investment Attractiveness Index is the most extensive report on government policies that influences the mining investment decision.
A lot of factors come into the mind of an investor before investing in a mining company. The investment attraction comes from financial and economic indicators, including the social condition in the region of investment, legal implications, political stability, taxation, infrastructure quality and governance. Investors try to base their decision on these grounds apart from the mineral potential of jurisdiction; however, it is very difficult for an investor to look into all these factors across all the geographies. As a result, sometimes, investors take the wrong investment decisions.
An Investment Attractiveness Index acts an indicator for mining investors to save their wealth from denting.
What is Investment Attractiveness Index?
The Investment Attractiveness Index is the most extensive report on government policies that either discourage or attract a mining investor. It is a composite index covering both the Best Practices Mineral Potential Index (BPMPI) and the Policy Perception Index (PPI).
PPI acts as a report card of government policies and provides comprehensive attractiveness of mining policies in a region. At the same time, BPMPI ranks the region's geology and exploration investment.
Canada-based Fraser Institute recently announced its Fraser Institute’s Investment Attractiveness Index (FIIAI) 2020. US state Nevada has topped the index among 77 jurisdictions. The US state attained the top position by stepping up from the third position in 2019. Western Australian glided to fourth place from 2019's top position. Saskatchewan registered significant growth by hopping eight slots in the list to attain the third spot.
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Let’s dive deep into the details:
2020 Investment Attractiveness Index Results Analysis:
- Australia beat the rundown of the most alluring region on the planet for investors this year, trailed by Canada and the United States. However, Europe is displaced from the list of top five.
- Australia holds the fourth spot in regional median policy scores, whereas it is a topper in the most attractive region for mining investment. This shows that Australia’s mineral potential is driving the investment attractiveness.
- Africa & Argentina registered an increase of 18%, whereas Canada and the US registered 5% surge in their relative investment attractiveness in 2020 compared to 2019’s results. On the flip side, Oceania, Europe, and Australia registered significant 15%, 13% and 3% dips in 2020’s investment attractiveness, respectively.
- The US, for the third time in a row, bagged the spot of top policy performer.
- Except for Canada, which slipped by 2% in regional median policy scores, all other regions registered a significant improvement. Africa registered an astonishing growth of 45% in regional median policy scores. Oceania topped the list from the bottom to have the least attractive regional median policy.
Australia’s Position Analysis:
Australia topped the list, considering both mineral potential and policy, to become the world's most attractive region of the world for mining investors. Western Australia and South Australia both featured on the top ten list on the 2020 Investment Attractiveness Index.
Victoria registered the highest increase of 10 points in PPI scores, followed by Tasmania, with 9 points. Victoria and Tasmania miners faced fewer concerns of uncertainty in administration, regulation enforcement, regulatory concerns, and environmental issues.
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New South Wales showed little improvement in scores but slipped from 45th spot to 49th spot in the 2020 PPI ranking as miners faced increased concerns over protected areas. Regulatory issues, including regulatory duplications and environmental regulations, continued to hamper the mining investment in NSW.
