CANADA’S Fraser Institute ranked Eritrea 77th in the World and 14th in Africa in its annual global mining survey 2014. The survey rates 122 jurisdictions around the world based on their geologic attractiveness and the extent to which government policies encourage exploration and investment.
Finland was placed first in the World overall earning high scores for having clear regulatory guidelines, an effective tax regime and a robust labor market.
Malaysia ranks as the least attractive jurisdiction for mining investment, followed by Hungary, Kenya, Honduras, Solomon Islands, Egypt, Guatemala, Bulgaria, Nigeria, and Sudan.
Amongst African countries, Eritrea ranks ahead of Kenya (120th), Mozambique (79th), Mali (82), Mauritania (87th), Uganda (92nd), Angola (93rd), Zimbabwe (100th), Niger (104th), Sierra Leone (105th), Lesotho (107th), Ethiopia (108th), Central African Republic (109th), South Sudan (110th), Sudan (113th), Nigeria (114th), Egypt (117th).
Eritrea ranks worldwide 77th (out of 122) in 2014 compared to 48th (out of 112) in 2013, a relative year-over-year drop. However, in the global comparison it is in the middle of the list and 14th place on the African continent.
According to Fraser, mining companies made the following selected comments about Eritrea,
“The decision to introduce mandatory government participation of 40% for any mining project … virtually eliminated the opportunity for intra-industry joint ventures and saw the immediate exit of the few majors prepared to handle the already significant political risk.”
“Eritrea is free from corruption and has a clearly set-out legal framework which is followed to the letter.”
The survey also showed that many African countries lag measures to attract mining investment and showcase their geological attractivness.
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FULL REPORT : Fraser Institute Annual Survey of Mining Companies 2014
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Six African countries—South Sudan (119th), Zimbabwe (118th), Nigeria (117th), Sudan (116th), Central African Republic (115th), and Ethiopia (114th)—ranked in the bottom 10 of the worldwide survey rankings this year.
Zimbabwe was amongst the bottom 10 in 2012/2013 and 2013. The greatest deterioration came from Nigeria, which dropped from 75th of 112 in 2013 to 116th of 122 this year.
Contributing to its decline was increased uncertainty concerning environmental regulations (-25 points), trade barriers (-9 points), and regulatory duplication and the legal system (each -8 points).
Ethiopia experienced a similar decline to Nigeria in its ranking. One of the selected comments made on Ethiopia by mining companies was;
“Inconsistencies between mining law and mining regulations; introduction of very high royalty rates.”
Kenya’s ranking plunged from 79th in the Fraser Institute’s 2013 survey to 112th in the most recent survey. The greater deterioration came from Nigeria, which dropped from 75th in 2013 to 116th in 2014.
Contributing to Nigeria’s decline was concerns regarding environmental regulations, trade barriers, regulatory duplication and the legal system.
Eight African jurisdictions were added to the 2014 survey, allowing Fraser to rank Central African Republic (109th of 122), Egypt (117th), Lesotho (107th), Mauritania (87th), Morocco (40th), South Sudan (110th), Sudan (113th), and Uganda (92nd) for the first time.
Eritrea was added to the survey together with Ethiopia, Fiji, France, Ivory Coast, Kenya, Liberia, Malaysia, Mozambique, Myanmar, Nicaragua, Nigeria, Portugal, Saudi Arabia, Sierra Leone, Thailand and Uruguay only last year.