Global Mining Regulatory Outlook: Diverging Trends
BMI View: Global mining regulation is set for divergent trends on a country-by-country basis as governments face difficult questions over how best to regulate their mining sectors in a post commodity price boom era. Mineral prices have passed their zenith and as Chinese economic growth will continue to slow, the governments of mineral exporting countries will receive reduced tax and royalty revenues. We expect regulatory outperformers and underperformers to be spread evenly throughout the globe as we forecast an attractive regulatory environment to take hold in countries including Malaysia, Saudi Arabia, Angola and Ecuador; while we expect increasing challenges for mining sector investors in countries including Mexico, Tanzania, Kazakhstan and India.
Of the 58 countries we cover for mining across the globe, 14 scored ' Positive' for their 12 Month Regulatory Outlook, 16 scored ' Negative' and the remaining 28 scored ' Neutral'. Reasons for a positive score included improved licensing and permitting arrangements, reduced bureaucracy, greater openness to foreign investment and tax breaks for mining companies. The reasons behind a deteriorating outlook were more diverse, including increasingly stringent environmental law, tax hikes, greater beneficiation requirements, complex bureaucracy, licensing bans and governments taking larger stakes in mines.
Improving Regulatory Environment: Key Themes
|Gold Prices & % Growth|