The survey collates views of mining company executives from around the world and ranks them on composite indexes in an attempt to assess how mineral endowments and public policy factors such as taxation and regulatory uncertainty affect exploration investment.
On the Investment Attractiveness Index, Western Australia was fell from first place to third – overtaken by Canadian jurisdictions Saskatchewan and Manitoba.
Minerals Council of Australia chief executive Brendan Pearson said that drop highlighted the risk to mining investment and jobs in WA posed by the ill-considered Grylls iron ore tax proposal.
Queensland was the big improver, moving up six places to number ten, while New South Wales fell from 38th to 62nd spot.
South Australia dropped three places to 13th while Tasmania and Victoria took spots 56 and 57.
SA’s fall was blamed on recent problems with power supply, which cost the state’s mining and minerals processing sector around $357 million in lost output.
Pearson said the survey showed other jurisdictions around the world were increasingly hungry for new investment, and politicians who proposed huge new taxes in a cavalier manner would inevitably damage the state and national reputation as an investment destination.
More concerning, perhaps, was that Papua New Guinea ranked higher on the investment attractiveness scale than New South Wales.
Indeed, NSW faced a fall in its Policy Perception Index too – its fifth consecutive decline in this area. Things such as the Planning Assessment Commission knocking back mining proposals that have been approved by other government agencies do not help in this area.
Rounding out the top ten jurisdictions in the world attractive for investment were Nevada, Finland, Quebec, Arizona, Sweden, the Republic of Ireland, and Queensland.
The bottom 10 jurisdictions are Jujuy, Neuquen, Venezuela, Chubut, Afghanistan, La Rioja, Mendoza, India, Zimbabwe, and Mozambique.
Despite its fall, WA was still rated to be the most attractive jurisdiction in the region and the third most attractive jurisdiction in the world this year, based on both indexes.
Pearson said with Australia’s minerals industry facing an effective tax rate of 54.3% it was critical a phased reduction in the company tax rate was introduced to remain internationally competitive.
“Today’s national accounts demonstrate that the Australian mining industry is a significant contributor to the Australian economy through growing export revenue, jobs, and taxes paid, and we cannot afford to sit back and allow our competitors to take advantage of our complacency,” he said.
The Australian Association of Mining and Exploration Companies CEO Simon Bennison said states and territories needed to lift their game when it comes to their mineral investment attractiveness.
He said almost all Australian states and territories fell on indexes ranking investment attractiveness and policy perception, which spoke volumes about Australia’s international competitiveness.
Bennison said at a time when investment capital was extremely competitive and mobile, Australia needed to be internationally competitive to encourage investment in the minerals sector.
He said this was integral for Australian jobs, mineral discoveries that become the mines of tomorrow and long term Government revenue streams.
“The survey results highlight the importance of getting policy settings right, in order to encourage investment, because if processes are duplicative and riddled with delays then companies will look elsewhere,” Bennison said.
He said AMEC would continue to advocate for ongoing funding for exploration incentive schemes and co-funded drilling programs, to encourage innovative mineral exploration in Australia and generate significant economic returns for the economy.