LatAm and Caribbean suffer steepest decline in mining investment attractiveness

Latin America and the Caribbean experienced the steepest drop in the median investment attractiveness score for mining this year, according to the annual survey of mining companies published by Canadian think tank The Fraser Institute. 

“It decreased by almost 20 points and the region has become the second least attractive region for mining investment globally. The region also saw a decrease of 5.62 points on its policy perception score from 2022,” the survey report said.

See the survey in the Documents box in the top right corner.

“The Fraser Institute’s mining survey is the most comprehensive report on government policies that either attract or discourage mining investors, and this year Utah ranks highest of anywhere in the world,” Elmira Aliakbari, director of the Fraser Institute’s Centre for Natural Resource Studies and co-author of the report, said in a press release. 

This year’s report ranks 86 jurisdictions around the world based on their geologic attractiveness (minerals and metals) and government policies that encourage or deter exploration and investment.

On policy alone, the Fraser Institute highlighted that Brazil (43rd) and Chile (49th) are the most attractive jurisdictions in the region for investment, while Colombia dropped in the ranking and is the least attractive jurisdiction in Latin America. “In fact, Colombia is the fourth least attractive jurisdiction for investment in the world, occupying the 83rd spot out of 86,” the survey said. 

Overall, Peru saw the highest increase in its policy score (+9.51 points) and went from 49th position (of 62) in 2022 to 61st (of 86) in 2023. “Miners were increasingly concerned about uncertainty regarding its protected areas (+12 points), Peru’s legal system (+12 points), and its labor regulations (+8 points).” 

“On the investment attractiveness index, Chile’s score decreased by 0.58 points, and the country went from ranking 35th place (out of 62) in 2022 to 38th (out of 86) in 2023. Chile ranks 49th (out of 86) on policy alone this year, a drop of almost 9 points from last year,” the report said. 

The Fraser Institute highlighted that “miners expressed increased concern over the uncertainty about which areas will be protected (+20 points), the quality of the country’s geological database (+16 points), and uncertainty regarding the enforcement of existing regulations (+7 points).”

Brazil saw a decrease of 0.48 points on the investment attractiveness index, from ranking 25th (of 62) in 2022 to 29th (out of 86) in 2023. On policy alone, Brazil’s score declined by over two points this year, and it ranks 43rd out of 86, according to the survey. 

“Respondents expressed increasing concern over uncertainty about which areas will be protected (+47 points), community development conditions (+37 points), and regulatory duplication and inconsistencies (+23 points).”

This year, Mexico’s investment attractiveness score decreased by over 23 points, leading to a drop from 37th (of 62) in 2022 to 74th (of 86) in 2023. Mexico’s score on policy alone decreased by five points, and it dropped in the policy ranking from 44th (of 62) to 68th (of 86). 

“Miners expressed increasing concern over Mexico’s infrastructure (+26 points), uncertainty regarding protected areas (+26 points), and regulatory duplication (+15 points),” the report said.

A respondent to the survey, an exploration company VP was quoted as saying that “recent amendments (in 2023) to the mining activity have emerged as a significant impediment to exploration efforts.” 

The VP of a producer company with more than US$50mn said, “the nationalization of lithium forces partnership with the government and lack of transparency.” 

For the first time, on policy alone, Colombia is among the five least attractive jurisdictions. “Colombia experienced one of the highest score drops on the policy index (-15.72 points) and this year ranks 83rd (out of 86) on the Policy Perception Index (PPI),” the Fraser Institute said.

“All of the respondents for Colombia were concerned about the country’s political stability, 95% of the respondents were concerned about Colombia’s legal system, and 89% were worried about the country’s security.”

Respondents also expressed increased concern about the quality of its geological database (+31 points), labor regulations (+28 points) and its taxation regime (+26 points), according to the survey.

The survey was conducted from August 16, 2023, to January 9, 2024. The Fraser Institute received a total of 293 responses from individuals, of whom 207 completed the full survey and 86 completed part of it.  

Over half of the respondents (59%) are company president or VP, and 23% managers or senior managers. The companies that participated in the survey reported exploration spending of US$4.1bn in 2023.

Good news

Argentina, which the Fraser Institute considers a region itself, ranked as the fourth most attractive region in the world for investment, with a median investment attractiveness score of 74.13. The country’s PPI score increased from 49.54 in 2022 to 64.40. 

Jujuy and Salta increased their PPI scores among Argentina's provinces. La Rioja received enough responses to be included in the report and ranks as the worst jurisdiction for policy and one of the least attractive for investment, ranking 83rd out of 86 jurisdictions. 

“All of the respondents for La Rioja were concerned about labor regulation, and 88% of respondents said the province’s legal system is a deterrent to investment.”

Salta (26th of 86) is the highest-ranked Argentine province on policy alone; the region increased its PPI score by 25.71 points this year. 

“Investors were less concerned than in the past about Salta’s political stability (-56 points), uncertainty about disputed land claims (-50 points), and trade barriers (-39 points). However, respondents were more concerned about community development conditions (+8 points), the taxation regime (+6 points), and infrastructure (+5 points),” the survey said.

When considering both policy and mineral potential in the investment attractiveness index, Niger ranks as the least attractive jurisdiction in the world for investment, followed by China, Solomon Islands, and Argentina's La Rioja. 

According to the report, Mozambique, Zimbabwe, Senegal, Kazakhstan, Bolivia and Cambodia are among the bottom 10, beginning with the least attractive for investment.