The Fraser Institute released the results of the 2021 annual survey of mining and exploration companies and the investment attraction index, which is built by assessing investment attraction by combining the mineral potential index of best practices, which ranks regions based on attractiveness geological; and the Policy Perception Index, a composite index that measures the effects of government policies on attitudes towards investment in exploration. Ecuador was the only Latin American country that improved its score in the index and climbed almost 15 points in the ranking.
Fraser's new study rated 84 mining jurisdictions around the world. Ecuador increased its score by around 26% compared to 2020. According to the Institute, this increase occurred because Ecuadorian miners are less concerned about uncertainty about the administration, interpretation and compliance with existing regulations, the availability of labor and other skills, and about the political stability of the country.
The Minister of Energy and Mines, Juan Carlos Bermeo Calderón, commented on the results and described them as “historic”, while reiterating that there is a “positive perception” of the international community, as reported by El Universo.
Based in Vancouver, Canada, the Fraser Institute conducts research on government actions in areas such as taxation, health care, aboriginal issues, education, economic freedom, energy, natural resources and the environment.
The survey was distributed electronically to approximately 2,200 people between August 23 and November 19, 2021. Responses to the survey have been counted to classify provinces, states and countries according to the extent to which public policy factors encourage or discourage mining investment, according to the Institute in a statement.
Despite the authorities' congratulations on the results of this ranking, indigenous and environmental organizations have raised protection remedies before the Constitutional Court, considering that the mining and oil policy of the government of Guillermo Lasso has an extractivist approach that goes against their territories and their right to a dignified life.
Politics as an attraction
On the Policy Perception Index (PPI), described as a “report card” for governments on the attractiveness of their mining policies, Ecuador improved its rating by 20 percent. However, the average score in this index for Latin America and the Caribbean Basin fell 17.5 points since 2020, equivalent to a 27% decrease, which has been classified as “the largest individual regional decline,” according to Fraser researchers.
Overall, Chile, Ecuador, Colombia and Mexico are the most attractive jurisdictions in the region for investment, based on policy. Despite being the highest-rated Latin American country in terms of politics, Chile declined its political score by 14.2 points, equivalent to 17%, this year. Miners in Chile expressed increased concerns about the country's legal system, uncertainty over disputed lands, and regulatory duplicity and inconsistencies. Respondents, the study notes, identified Chile's political stability as the deterrent to investment, possibly due to the ongoing constitutional reform.
Fraser's study explains that the 10 least attractive jurisdictions for mining investment based on PPI rankings, starting with the lowest rated, are Venezuela, the Philippines, Chubut in Argentina, Nicaragua, Mendoza — also in Argentina, Zimbabwe, Democratic Republic of Congo, Bolivia, Kyrgyzstan and Mongolia.
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