Nam’s mining allure improves slightly
Policy perception remains problematic
Namibia's mineral potential has gained international investor tracking, but the country's policy is viewed as increasingly negative.
Namibia has emerged the sixth most attractive mining investment destination in Africa in 2022, an improvement from the seventh spot it held the previous year.According to the Fraser Institute’s 2022 annual survey of mining and exploration companies released last week, Namibia achieved an overall investment attractiveness score of 59.88 compared to 52.59 in 2021.
African countries which fared better that Namibia were Botswana (82.75), Morocco (74.13), Ivory Coast (65.49), Burkina Faso (64.61) and Ghana (62.27).
Overall, Namibia was ranked 38th out of 62 jurisdictions worldwide. In 2021, the countries was 59th out of 84.
The Fraser Institute’s overall investment attractiveness index is constructed by combining the best practices mineral potential index, which rates regions based on their geologic attractiveness, and the policy perception index (PPI), a composite index that measures the effects of government policy on attitudes toward exploration investment.
Namibia 2022 PPI score was 69.35, a decrease from the 75.24 in 2021. The country’s best practices mineral potential, however, surged from 37.50 to 53.57.
Results
In 2022, Africa's median score on the investment attractiveness index increased by 2.4 points.
However, miners still consider Africa the third least attractive region for mining investment when mineral potential and policy are taken into account, with a median score of 54.25.
Nevada has claimed the top spot on the investment attractiveness index, climbing up from its third place position in 2021.
Western Australia, which held the top ranking in 2021, now stands in second place, while Saskatchewan maintains its position on the podium, dropping slightly to third place this year.
Completing the top 10 are Newfoundland & Labrador, Colorado, Northern Territory, Arizona, Quebec, South Australia and Botswana. The United States, Canada and Australia each have three jurisdictions represented in 2022's top 10, with Africa accounting for one.
Africa
Starting with the least attractive, the PPI rankings identify the 10 jurisdictions with the lowest investment appeal: Zimbabwe, Guinea (Conakry), Mozambique, China, Angola, Papua New Guinea, the Democratic Republic of Congo (DRC), Nunavut, Mongolia and South Africa.
In 2022, Africa accounted for six of the bottom 10 jurisdictions, followed by Asia with two, Oceania with one, and Canada with one.
The 2022 survey shows that six African countries - Zimbabwe (62nd), Guinea (Conakry) (61st), Mozambique (60th), Angola (58th), DRC (56th) and South Africa (53rd) - ranked among the bottom 10 in terms of policy.
In terms of overall investment attractiveness scores, eight African jurisdictions were ranked in the global bottom 10: Zimbabwe (62nd), Mozambique (61st), South Sudan (60th), Angola (59th), Zambia (58th), South Africa (57th), DRC (55th) and Tanzania (53rd). Zimbabwe has consistently been in the bottom 10 for the past nine years.
In terms of policy, Botswana is Africa's top-ranked jurisdiction and second-highest in the world for 2022 (2nd out of 62).
Botswana's increase in its PPI score by 23 points indicates reduced concerns regarding uncertainty over protected areas (-53 points), infrastructure (-40 points), political stability (-29 points), and labour regulations and employment agreements (-29 points).
When considering both policy and mineral potential, Botswana is also the most attractive jurisdiction in Africa and ranks in the top 10 globally, placing 10th out of 62 in overall investment attractiveness.
SA and Zimbabwe
South Africa's policy score has declined by 20 points, and it now ranks 53rd out of 62 jurisdictions.
Investors have become increasingly concerned about the availability of labour skills ( 18 points) and infrastructure ( 15 points).
Furthermore, survey respondents indicated that regulatory duplication (74%) and uncertainty regarding the administration and enforcement of existing regulations (67%) remain significant impediments to investment.
Zimbabwe, which is the least attractive jurisdiction for mining investment globally and the lowest-ranked African jurisdiction based on policy (62nd), has experienced a significant decline of almost 29 points on its policy score.
All survey respondents expressed concerns about the uncertainty surrounding the administration, interpretation, or enforcement of existing regulations, as well as the country's infrastructure, which are major deterrents to investment in Zimbabwe, according to the Fraser Institute.