The Fraser Institute, a Canadian based think-tank that Wikipedia describes as “politically conservative and right-libertarian” earlier this year released its 2011-2012 “Survey of Mining Companies.” While this is from the earlier part of 2012, it’s not something I had seen before and contains valuable information on the state of U.S. mining and natural resource policy and regulation, information that is not easy to come by. The Fraser Institute has been producing these reports annually since 1997, and have a very thorough and reliable methodology that is well documented.
Unfortunately the older reports are only available in print editions (which cost a lot of money), so the oldest year to year comparisons we have are from 2008, which in the grand scheme of mining and resource policy is quite recent. Given the staggering number of survey results in the report, its possible to draw a number of conclusions from the report, and it is somewhat confusing because many of the scores are calculated with consideration given to how much of a resource the country or state might have (the more resource deposits the higher the scores). However, there are some disturbing results from the United States even within the last few years. From page 15 of the report:
Out of the 14 states, over 50% of respondents for 6 different states agreed that “uncertainty concerning the administration, interpretation, and enforcement of existing regulations” were either a mild or strong deterrent against mining investments. Out of those six states, California, Colorado, Missouri, and Washington appear to be the worst.
The report also includes some commentary from those making investment decisions in resource production and mining firms. This is arguably the most depressing section of the report if you’re a believer in the benefits of mining and resource production (p37):
In the United States, the lack of understanding of the natural resource sector is astounding. Unfortunately, many of the policy decisions implemented by the state(s) and federal government in the United States in the past 20 years have made exploration and mining virtually impossible to undertake, and are bound to have horrific consequences for the nation, in terms of commodity prices, national security, and job growth.
—An exploration company, Company president
California seems to lead the way in North America in trying to impeded development of any sort. Most of the radicals are on the west coast, and seem to enjoy the fruits of industry so long as it does not negatively impact on their lifestyle.
-An exploration company, Vice-president
Permitting in New Mexico is extremely complicated with much duplication and uncertainty between the various state agencies.
-An exploration company, Company president
It’s clear that the U.S. would benefit from improvements in our mining and resource production laws that would provide certainty to exploration companies, and perhaps fewer opportunities for environmentalists to stall progress for the sake of stalling progress.
To end on a slightly upbeat note, one manager had very nice things to say about Utah:
In our exploration operations in Utah, we have found the regulatory authorities very helpful and accommodating. Although we are at the exploration stage, we have found that the relevant authorities have helped to facilitate our permitting process (drilling) and have the attitude, “How can we make this happen?” versus how not to. There is no ambiguity.
-An exploration company, Senior management.