A new study finding that Nevada is one of the most attractive places in the world for mining investment gives as much weight to politics as it does to minerals in the ground.
The Fraser Institute, a public policy institute based in Vancouver, British Columbia, last week reported that only Chile is a more attractive place for mining companies.
The finding was based on a survey of executives of 159 mining companies around the world.
Nevada's potential mineral resources rank fifth in the world, the mining executives said.
The list was topped by Russia, followed by western Australia, Peru and Chile.
The state ranked higher, however, in the perceptions of mining executives about its regulatory and public policy environment.
They ranked the state second, trailing only Chile.
The importance of a favorable business environment for mining can't be overlooked, said Liv Fredricksen, coordinator of the survey for The Fraser Institute.
"Attractive geology is necessary, but not enough," she said.
"Governments who want to maintain viable mining industries in their jurisdictions must enact favorable policies to encourage investment."
Nevada won high marks nearly across the board on its regulatory climate for mining.
In fact, 12 of the companies involved in the survey said Nevada has the most favorable policies toward mining of any jurisdiction in the world.
Some 87 percent of the mining executives who responded to the study said the regulatory process in Nevada is predictable enough to encourage investment.
The state's political stability was encouraging to 89 percent of the respondents.
None of them believed that regulatory duplication or the state tax system discouraged exploration.
Negatives for the state? Nine percent of the executives surveyed said they worry about environmental regulations.
And 6 percent said investment in Nevada's mining industry may be dampened by uncertainty over land claims.
The reported heartened Russ Fields, president of the Nevada Mining Association.
"This is exactly what we want to see," Fields said.
"We want to foster things that keep us near the top."
At the same time, he said Nevada needs to avoid steps that would erode mining executives' confidence in making investments in the state.
A growing worry, he said, is the amount of time required for state and federal regulators to approve projects.
"We continue to work with our regulators to find ways of increasing the efficiency of that process," said Fields, who said the industry isn't looking to cut corners but instead wants to speed permitting whenever possible.
Slowdowns in permitting, he said, raise the risk for mining companies.
Attracted by gold prices over $400 an ounce, they may begin development of a mine today that won't be in operation for four or five years when prices may have changed dramatically.
The risks presented by a price decline are magnified if a project is hung up in the approval process.
Fredricksen said The Fraser Institute survey hasn't tracked changes from year to year in the viewpoint of executives about attractive places to invest in mining projects.
She noted, however, that perceptions change more slowly than reality.
For instance, British Columbia, which recently changed some of its mining-related policies, continues to rank low in the perceptions of executives.
In the United States, the locations viewed by mining executives as the worst for investments included California, Wisconsin, South Dakota and Colorado.
