Zambia is currently ranked as the world’s 30th most attractive mining destination in the world. This is according to the latest rankings from the Fraser Institute, a Canadian think tank, which looks at various aspect of economic freedom. One of the issues that it measures is the investment climate of mining jurisdictions around the world, based on the opinions of mining industry executives and managers. They are asked their opinion on fifteen issues that contribute to investment attractiveness. These include uncertainty around existing regulations; uncertainty around environmental regulations; the legal system; the tax system; availability of skills and labour; labour regulations; and political stability, among other issues. The answers are then collated to determine how attractive a particular jurisdiction will be for mining investors.
In 2016 Zambia enjoyed a strong jump in its attractiveness as a mining destination.
As noted, Zambia fared well on the most recent survey released by the Fraser Institute, being ranked 30th out of 104 mining jurisdictions. In Africa it was the fifth most attractive mining destination in Africa, behind Ivory Coast, Botswana, Ghana, and the Democratic Republic of Congo (DRC).
Zambia’s position as a mining investment of choice had been on a downward trend for some time over the past decade, with a sharp drop in 2015. However, in 2016, as the graph shows, Zambia (represented by the orange line) enjoyed a strong jump in its attractiveness as a mining destination.
According to the Fraser Institute, Zambia’s drop in 2015 was due to the increase in the Mineral Royalty Tax, and the lack of policy certainty around the implementation of the tax. Conversely, the reason for Zambia’s marked advance on the rankings in 2016 was because of improvements in labour regulations, as well as greater availability of labour and skills. The survey may also reflect investor sentiment regarding policy decisions made by governments in a previous year. For example, a drop in Zambia’s ranking in 2015 could reflect negative policy decisions made in 2014.
See also: How mining has made Zambians richer