Wednesday, May 7, 2014

Mining Investments - WHERE NOT TO INVEST by Behre Dolbear


Mining Investments - WHERE NOT TO INVEST by Behre Dolbear

One of the oldest mining consulting companies in the world Behre Dolbear provides quality advice for mining investors worldwide, and their documents are well respected by industry professionals.

Indeed, when making the right decision about investment strategy it is important to take into consideration as much information as possible.  Since 1999, Behre Dolbear started a political risk assessment of countries important  to the mining industry. This is alleviated by the fact that mining industry is vital to the creation of wealth and prosperity in
any country.

The  Behre Dolbear's assessment includes the high risk and low risk parts of the world for receptivity to mineral investment, as well as information about conditions in the countries such as economic and political systems, social issues, permitting, corruption, etc. It interesting to note that the company has a very peculiar stance regarding their report, as it is mentioned in the preface:
"We recognize that many might consider what we have said to be provocative, which is our intent." 
However, whatever provocative their findings are, they are nevertheless valuable  both in staregy panning and execution of everyday business. This is not technical assessment, as one might expect -  "Geology and mineral potential were not considered, as the fact that exploration, development, and mining activity are occurring confirms the existence of such potential. We recognize that if a major mineral deposit exists in a high-risk country, a mining company might well decide that the financial incentive exceeds the political risk; e.g., Barrick’s Reko Diq project in Pakistan and Banro Corporation in the eastern Democratic Republic of the Congo (D.R.C.)."
The countries are ranked by the following criteria:

  • the country’s economic system;
  • he country’s political system;
  • the degree of social issues affecting mining in the country;
  • delays in receiving permits due to bureaucratic and other delays;
  • the degree of corruption prevalent in the country;
  • the stability of the country’s currency; and,
  • the country’s tax regime.

So, this make another essential document that any mining professional has to read and study
It can be downloaded HERE

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