The headline news in this year’s Fraser Institute survey is the significant decline of Chile in various rankings, as reflected in the Policy Potential Index (PPI). Last year, Chile ranked 3rd in the PPI with a composite score of 87 out of a possible 100. This year, Chile fell to 27th, with a score of 64. Most worryingly, of the 12 policy areas examined in the survey, Chile suffered its biggest declines in the areas of political stability and security.

Chile’s decline can also be seen in the ‘Room to Improve’ figure, which measures the difference between the attractiveness of a jurisdiction under its current policy regime and under a ‘best practices’ regime. Last year, Chile scored about the same response on the ‘current’ and the ‘best practices’ question, indicating that most miners felt Chile was close to or at best practices. This year, there was a 9.2% gap.

Since 1997, The Fraser Institute has conducted an annual survey of metal mining and exploration companies to assess how mineral endowments and public policy factors such as taxation and regulation affect exploration investment. Survey results represent the opinions of executives and exploration managers in mining and mining consulting companies operating around the world. The survey now covers 65 jurisdictions around the world, on every continent except Antarctica, including sub-national jurisdictions in Canada, Australia, and the USA. This year, Colombia was added to the survey.

The PPI is a composite index, measuring the overall policy attractiveness of the 65 jurisdictions in the survey. The PPI is normalized to maximum score of 100. A jurisdiction that ranks first in every policy area would have a score of 100; one that scored last in every category would have a score of 0. Since no nation scored first in all categories or last in all, the highest score this year is 93.1 (Manitoba), while the lowest score is 2.9 (Zimbabwe).

Manitoba ends Nevada’s six-year run at the top of the PPI. Nonetheless, Nevada remains highly ranked, in 3rd place with 89.3. The other top-10 policy jurisdictions are Alberta, Utah, South Australia, New Brunswick, Quebec, Queensland, Tasmania, and Saskatchewan.

Zimbabwe’s last place score of 2.4 last year was the lowest score ever recorded in the PPI. This year Zimbabwe’s last place score was 2.9, the second lowest in the history of the PPI. Other bottom scorers were Venezuela, Bolivia, Mongolia, the Philippines, Papua New Guinea, Kazakhstan, Russia, DRC Congo, and Indonesia. The Institute says that “seldom, if ever, has the mining survey received as many negative notes about one jurisdiction as it has this year about Mongolia.” The president of one producer company put it: “Mongolia has literally overnight changed policy from one of openness to one that heavily penalizes foreign owned mines.”

Last year in the PPI, Mongolia had only a middling rank and score, ranking 33rd out of 64 with a score of 54 out of 100. But this year, Mongolia’s position collapsed, coming in at 62nd out of 65 with a score of 11 out of 100.

Colombia was new to this year’s survey. In the past, the mining community has expressed little interest in having Colombia in the survey. This was likely because it was perceived as too unstable and dangerous to attract much interest. However, Colombia’s government has made large strides in improving security and battling criminal gangs and guerillas. Despite that, Colombia’s score on the PPI was quite low, 25 out of a possible 100, with a ranking of 55th out of 65. Nonetheless, it is far ahead of Bolivia and Venezuela and not too far behind Peru and Ecuador, both of which had scores of 30. After years of turmoil and bad publicity, it is hardly surprising that Colombia entered the survey at a low level. The key questions will be whether Colombia’s improving situation holds into the future and whether the country gains the trust of the mining community.

It takes time for the mining community to gain trust that improvements will endure. That is exemplified by British Columbia, in which the Fraser Institute is headquartered. The survey was originally motivated in 1997 by the failure of mining policy in that Canadian province. Over the first years of the survey, British Columbia was either at or near the bottom in mining policy.

Several years ago, mining policy in British Columbia began to change. However, this resulted in only slow changes in British Columbia’s position in the survey since. Two years ago was the first time since the survey’s inception that British Columbia had not scored in the bottom 10 of the PPI, though it remained in the bottom third. In last year’s survey, British Columbia ranked in the top half and was a couple of positions away from the top third.

However, this year’s report represents the first time since the 2001/2002 survey that British Columbia has not seen an improvement in its score or rank. Its score of 61 is almost identical to last year’s 62, though it did decline in the rankings from 23rd to 30th. This makes British Columbia the lowest ranked of the Canadian provinces, though above the Northwest Territories and Nunavut.

And where did industry driving nations end up? China ranked 54th, one place behind South Africa and one ahead of Colombia. India was placed 49th, one behind California, and one ahead of Zambia. Finally, moving further up the scale, Brazil came 36th, flanked by New Zealand (35th) and Ireland (37th).