Chile is a country with a mining tradition and I think it is a matter of time before the numbers are in our favor again.”
Alicia Domínguez, Tax Partner and leader for the Energy and Mining industry at EY
Where is the best place in the world to invest in mining? According to a study by the Fraser Institute, it is Nevada, United States. It is followed by Western Australia, the Canadian provinces of Saskatchewan, Newfoundland and Labrador, as well as the US state of Colorado.
Chile, meanwhile, is in 35th place of the 62 countries in the sample, below jurisdictions such as Morocco, Ecuador, Peru and the province of San Juan in Argentina.
This position is the worst in recent years: in 2018, Chile ranked sixth as the best district to invest in mining. That is, it has dropped 29 positions in four years. In 2021, Chile ranked 31st and, in 2020, in 30th place.
The countries where there is less interest in investing in mining are Zimbabwe, Guinea, Mozambique, China, Angola, Papua New Guinea, the Democratic Republic of the Congo, Mongolia and South Africa. The Fraser Institute survey was conducted between August and December 2022 and involved 1,966 mining company executives.
The survey is designed to capture the views of managers and executives on the level of barriers to investment in jurisdictions with which their companies are familiar, probing aspects such as the political environment, the interpretation or application of existing regulations, the uncertainty with regarding environmental regulations, duplication and regulatory inconsistencies, the legal system, the tax regime.
Other issues considered are infrastructure, political stability, labor regulations, the quality of geological information, the level of citizen security, and the quality of human resources.
According to Cochilco, today in Chile there is an investment portfolio made up of 53 projects that together add up to 73.655 million dollars, which will be developed in the period 2022-2031.
political perception
While geological and economic considerations are important factors in mineral exploration, a region’s political climate is also an important investment consideration. For this reason, the think tank created the Political Perception Index (PPI), which is a composite index that measures the general attractiveness of the policies of the 62 jurisdictions in the survey.
Chile is in 38th place of the 62 districts analyzed, maintaining the position of the previous year, but a downward curve compared to previous years, since in 2019 it was in 23rd place and, in 2018, in 15th place.
The index is composed of survey responses to policy factors that affect investment decisions. Why does Chile fall back in the index? Alicia Domínguez, Tax partner and leader for the Energy and Mining industry at EY, pointed out that “currently our country has unresolved issues that generate uncertainty and slow down investment, such as the mining royalty discussion.”
