NUNAVUT
Nunavut ranked last in Canada for investment attractiveness in a recent survey of global mining executives.
An aerial view of the Hope Bay gold project Doris North Camp, located about 90 km south of Cambridge Bay, now owned by TMAC Resources Inc. A new survey has lowered Nunavut's ranking for investment attractiveness. - photo courtesy of Hope Bay Mining Ltd. |
In the Fraser Institute's 2012/2013 survey of mining companies, the territory placed 37th out of 96 jurisdictions around the world, compared to 36th out of 93 last year, and trailed behind the NWT, which this year rose to 29th place from 48th in 2012.
"Nunavut did drop one spot down in the rankings this year but what's important to keep in mind is that its own policy potential index score did improve," said study author Alana Wilson, explaining the 15 different policy factors used to rank the jurisdictions, including the taxation regime, certainty in environmental regulations, and labour and skills availability.
Nunavut scored strongly in terms of security and the quality of its geological database, but scored lower in the areas of uncertainty concerning environmental regulations; regulatory duplication and inconsistencies; and uncertainty over which areas will be protected as wilderness and parks.
"It's not as though miners are opposed to set aside for wilderness and parks, but if there's a lot of money spent exploring in an area and then it's excluded for one reason or another and they aren't able to proceed in developing a mine there, that could decrease confidence in an area," Wilson said.
The NWT, which was the lowest ranked Canadian jurisdiction in the survey last year, saw the largest year-over-year improvement, with higher scores across all 15 policy areas measured in the study of investment encouragement.
The most significant improvements were seen in the territory's legal system, labour and skills availability and in regulatory and administrative uncertainty.
Other factors that might have contributed to the improvement of the NWT in the global survey include the announcement of the Mineral Development Strategy; a recent memorandum of understanding signed between the Akaitcho Dene First Nations and the NWT and Nunavut Chamber of Commerce; and the fact that the territory has five projects successfully advancing through the approval and/or regulatory processes, stated chamber executive director Tom Hoefer, in an e-mail to News/North.
Hoefer was stumped about Nunavut's drop in the mining survey.
"I believe Nunavut should also rate quite well. They have very solid investment," Hoefer stated, pointing to recent Natural Resources Canada statistics, which show stable investment in Nunavut.
According to the department's latest Exploration and Deposit Appraisal Expenditures by province and territory, $535.7 million was spent in Nunavut in 2011, compared to $93.8 million in the NWT.
The NWT Chamber of Commerce believes that proposed infrastructure investment, regulatory reform and devolution are contributing to a change in investment conditions in the NWT.
"We are a resource-based economy so it's encouraging that mining executives are viewing us in a better light," stated president Hughie Graham in a news release responding to the Fraser Institute's survey.
"But we still have a long way to go."
There is room for policy improvement across all jurisdictions in terms of improving mining investment, Wilson said, especially with the currently bleak financial outlook for mining investment.
"We ask respondents about their expectations for commodity prices and over the next couple years they expect commodity prices to increase by 10 per cent or less, or even decline in almost all the commodities we asked about," she said. "Only gold's expected to increase in value.
"In the short term, the respondents were pessimistic about commodity prices."
The survey was conducted between Oct. 9 and Jan. 6 and represents responses from 742 exploration, development and other mining-related companies around the world.
