Monsters of Rock: Rejoice! Australia continues to be a more attractive investment destination than Zimbabwe

WA down from 1st to 2nd as Nevada snatches top place in Fraser Institute Survey
Australia most attractive country for mining investment, though sample size hampers survey
Will Tasmania improve its lowly rating after AFL team’s announcement?

The newest Fraser Institute survey is out, a document mining lobby groups love to wave in front of governments to force them into some red-tape-cutting ceremonies.

The latest edition is compromised by sample size. Just 62 jurisdictions could be included this year, down from 84 in 2022, presumably because the countries they operate in are lacking functioning internet or postal workers – never a good sign.

Australia Post job cuts aside, Australians managed to return their forms and the news is, by and large, good for the miners.

It should be. In this age of critical minerals, EVs and net-zero cabinet ministers are falling over themselves to throw money at mining companies all across the western world.

There has rarely been so much support for miners from government – the old mob in Canberra threw a cheap as chips $1.25 billion loan the way of ASX 100 mineral sands giant Iluka Resources (ASX:ILU) to diversify into rare earths, for example.

The Fraser Institute’s Investment Attractive Index rates states and nations on a weighting of 60% mineral potential and 40% policy settings.

Uncertainty around mining permits, unannounced coal royalty increases in Queensland, labour shortages in WA and inconsistencies in Victoria all cop a whack from respondents to the report.

But by and large it’s a good read for Australia, which edges out Canada to top place on a country level. As far as individual jurisdictions go, WA has fallen from 1st to 2nd behind Nevada, where gigafactories, the IRA and all that are making investment pretty tasty.

Following WA, the NT is in 6th, up from 14th a year ago. South Australia is up from 10th to 9th, Queensland up from 18th to 13th despite coal miners’ royalty complaints, New South Wales up from 33rd to 23rd and Victoria… down from 33rd to 47th in a performance uncannily reminiscent of the Melbourne Victory’s fall from grace.

Speaking of those lobby groups

The Association of Mining and Exploration Companies, representing the little man… sorry we mean the little miners, many of them capped in the 100s of millions of dollars, says it’s mostly positive.

But there’s still plenty for the industry to chirp about.

“All in all, these results reflect well on Australia’s performance, with most jurisdictions either maintaining or improving their position in the overall rating of investment attractiveness,” AMEC CEO Warren Pearce said.

“And while these results are encouraging, there is always room for further improvements here in Australia.”

“Many such initiatives are underway around Australia, and we will continue to work with Governments to deliver a welcoming investment environment for our sector, to drive this investment.”

“However, there are, equally, many concerning policy and regulatory developments here in Australia, that have the potential to negatively impact our reputation as a safe investment jurisdiction.

“These include the massive increase in Queensland coal royalties, greater uncertainty around tax increases for petroleum and mining sectors at a Commonwealth level and increasing levels of environment and heritage regulation across the board.”

It’s not like anyone brought that last one on themselves by blowing up a 40,000-year-old rock cave full of Aboriginal artefacts.

Eight of the bottom 10 came out of Africa, Zimbabwe dead last.

Not every one sees it that way.

Prospect Resources (ASX:PSC) made a decent living selling its Arcadia lithium mine to China’s Huayou Cobalt a couple years ago and Zimplats (ASX:ZIM) is a solid mid-tier operator.

Operating in tough jurisdictions with great orebodies is many a miner’s cup of tea. Ask Robert Friedland, who made his first fortune in No. 4 jurisdiction Newfoundland & Labrador (woof) but now extols the virtues of mining copper in the DRC – 8th last.

Saskatchewan, uranium hub of Canada, ranks third, with Colorado, Arizona, Quebec (Aussie lithium expats rejoice) and Botswana, home to Sandfire Resources’ (ASX:SFR) new Motheo copper mine, in 10th.

In the bottom 10 alongside Zimbabwe sit Mozambique, South Sudan (not the home of the recent civil war), Angola, Zambia, South Africa, China and Papua New Guinea. Again, grain of salt here, some of these jurisdictions fielded only 5-9 responses and China with its dig anything that doesn’t move mentality is a fertile investment destination for Chinese businessmen with links to the Communist Party.

Sitting just four spots above PNG in 10th last is Tasmania again on limited responses. We’re sure that’ll change. It’s getting an AFL team soon and the State Government’s pumping millions into Gillon MacLachlan’s new stadium – a sign the Apple Isle’s open for business, good or bad.

And on the markets

It’s all rolled gold at the top of the ASX materials sector today, with bullion’s run to US$2050/oz, just a quarter of a century off all time highs, seeing most of the big precious metals miners in the green.

Climbing highest above the pack was dual-listed SSR Mining (ASX:SSR), which announced a little US7c per share dividend to keep shareholders happy.

It came after what was operationally a pretty poor quarter. SSR, which has operations in Turkey, Canada, Argentina and the US, produced 122,821oz of gold and 2.015Moz of silver, with a smattering of lead and zinc, in the first quarter at all in sustaining costs of US$1693/oz.

That compares unfavourably to this time last year, when SSR turned out 157,011oz of gold (though only 1.3Moz silver) at US$1093/oz.

But things are expected to improve after a big sustaining capital spend in the first quarter, with SSR saying it remains on track to deliver full year guidance.

“During the first quarter of 2023, the Company announced 2023 production guidance of 700 to 780 thousand gold equivalent ounces at consolidated cost of sales of $1,055 to $1,115 per gold equivalent ounce and AISC of $1,365 to $1,425 per gold equivalent ounce,” the company said.

“In addition, SSR Mining’s threeyear outlook highlighted a strong and stable production base of approximately 700 thousand gold equivalent ounces through 2025 without requiring significant capital investment.

“Full year projected production and cost expectations remain aligned with the existing consolidated guidance ranges.”

SSR was up more than 9% while materials in general ended the day’s trade up 0.56% despite a big fall for iron ore futures, with lithium and gold companies leading the way.