feat. MineHutte ratings - The Mining Journal RER feat Mineutte ratings 1 feat. MineHutte ratings 217

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  • feat. M ineHutte rat ings

    Executive Summary

  • 1feat. MineHutte ratingsREPORT feat . MineHutte rat ings

    2017 edition

    Foreword

    Taking a long-term view of risk Risk management has always been one of the fundamental considerations for mining companies to ensure safe, responsible and sustainable operations. As physical risks evolve with scaling up of operations or with increasing technical and social complexity, so do a wider range of risks become more prominent.

    This evolving risk dynamic demands specific management strategies to minimise the potential for uncertain outcomes. It doesn’t matter if you are a major mining house or a junior developing your first operation, risk identification and management must be core to your management processes.

    In an industry where we have so little certainty about our markets and where we manage with imperfect information on orebodies, our ability to manage uncertainty is a key to delivering continuing success.

    Our commitments to what are ore bodies of fixed abode often span many decades, during which time societies will likely change their expectations and way of life, while our host governments will transition many times over.

    And of course the demand patterns for the metals and minerals we produce are always evolving, just as consumers will have to keep in mind that security of supply can easily be at risk due to geopolitical, economic, environmental or other developments.

    The one certainty is that we cannot predict the future with any accuracy. That said, risk assessment is an area that combines process and data with subjective opinion that can vary rapidly depending on the most recent news flow. We don’t have that luxury in mining – we generally need to take a long term view, make decisions and then manage our positions over the long term.

    As a diversified major, Anglo American has long operated across a wide range of mining jurisdictions, from the well-developed to the emerging markets. As is necessary in such a highly connected world, we take a holistic view of risk, drawing together today’s snap opinions with a wide variety of other less variable factual inputs from all manner of established studies and indices, in addition to our own depth of experience.

    The secret to all such measures is consistency of approach and a broad spread of inputs. This is where, I believe, there is space and value in a risk rating system that is tailored to the breadth of risk exposure that mining companies face. From my understanding, this is the basis of what the Mining Journal World Risk Report (feat.MineHutte ratings) is trying to achieve.

    REPORT feat . MineHutte rat ings

    Author: Mark Cutifani, chief executive, Anglo American

    “In an industry where we have so little certainty about our markets and where we manage with imperfect information on ore bodies, our ability to manage uncertainty is a key to delivering continuing success”

  • 2 feat. MineHutte ratingsREPORT feat . MineHutte rat ings

    2017 edition

    Foreword

    In my view, the feedback loop to our principal counterparties – usually the governments in our host countries – is equally important. I have seen first-hand how irritated people can become when told by a remote global body that their country is on the wrong end of a risk scale and, conversely, the pride communities can show when progress is recognised.

    Part of our role as industry leaders is to work more collaboratively with our hosts – be they government officials, regulators, community leaders, donors or civil society – to support their goals and build an understanding of the breadth of possibilities for modern mining.

    Our primary objective must be to play a developmental partner role, not only by contributing to physical infrastructure such as roads, rail and housing, but also in terms of fostering capacity and skills, as well as the legal and regulatory frameworks that underpin investment such as that offered by mining. Those frameworks, if stable and crafted well for the long term, lie at the heart of delivering the economic competitiveness that is so often desperately needed to create jobs and improve living standards in developing countries.

    Mining will long continue to be an essential activity if we are to adequately provide for the world’s inevitable demand growth.

    The role we can play in engaging with society, in innovating tirelessly to reduce the impacts of mining, and in ensuring our total contribution is appropriate and well understood, can only serve to increase understanding and acceptance of – and trust in – our industry amongst our many and varied stakeholders.

    Over time, that positive approach ought to be evident in an improved risk profile for the industry as a whole and for individual mining jurisdictions, creating a win-win for the people of our host countries, for our industry and for the billions of consumers around the world who rely on our products more and more in their everyday lives.

    “I have seen first-hand how irritated people can become when told by a remote global body that their country is on the wrong end of a risk scale and, conversely, the pride communities can show when progress is recognised”

  • 3feat. MineHutte ratingsREPORT feat . MineHutte rat ings

    2017 edition

    Contents

    REPORT feat . MineHutte rat ings

    In this Executive Summary

    Additionally, in the full report

    1 EXECUTIVE SUMMARY 4

    2 INVESTMENT RISK INDEX: Section Preview 7

    3 SELECTED LEADER ARTICLES 15

    4 GENERAL RISK: Selected charts 21

    5 COUNTRY INVESTMENT PROFILES 24

    1 INVESTMENT RISK INDEX

    i Methodology

    ii Inputs

    iii Investment Risk Index: Summary Results

    iv Legal

    v Governance

    vi Social

    vii Fiscal

    viii Infrastructure

    ix Investment Risk Index: Reference Tables

    2 GENERAL RISK PERCEPTION

    i Introduction/methodology

    ii Business risk

    iii Operating risk

    3 REFERENCES

    Read the full 128-page World Risk Report for:

    Investment Risk Index findings, analysis and discussion broken down into Legal, Governance, Social, Fiscal and Infrastructure risk baskets

    Hard risks vs risk perception, drawn from established risk metrics and Mining Journal’s 2017 World Risk Survey

    Business and operating risks assessed on both severity and manageability

    Download the full report: mining-journal.com/mining- journal-world-risk-report-2017

    feat. M ineHutte rat ings

    £495

    http://mining-journal.com/mining-journal-world-risk-report-2017

  • 4 feat. MineHutte ratingsREPORT feat . MineHutte rat ings

    2017 edition

    Executive summary The ability to identify, acknowledge and manage risks is today paramount for the successful running of an explorer, developer or producer. Mining’s rising risk profile also implies the importance of those skills is only increasing. Our contribution to that challenge is the Mining Journal World Risk Report (feat.MineHutte ratings), which includes the Investment Risk Index.

    The Investment Risk Index is a robust system for rating jurisdictions across several key metrics (Legal, Governance, Social, Fiscal and Infrastructure). It is weighted toward the findings of established risk-related indices but also includes perceived risk numbers based on the results of Mining Journal’s World Risk Survey. The theory is by rooting the product in hard numbers, it is more resilient to large, year-on-year swings than a purely survey- driven system.

    The hard numbers were compiled and created from multiple sources and we strongly encourage readers to go through the Methodology and Inputs sections so they fully understand the origin of the figures and can therefore make full use of this tool.

    As the product of this research, we’re able to present more than 3,600 aggregated and created datapoints across 85 jurisdictions. Some 17,000 words of analysis and discussion, along with almost 5,000 words of thought leadership script have been compiled around that data.

    The General Risk section of the report that covers geographically indiscriminate business and operating risks carries its own set of unique data accompanied by some 7,000 words of commentary.

    Findings

    The overwhelming conclusion from this research was North America, and Canada specifically, is the safest place to invest resources capital. Five of the AAA-rated (negligible risk) jurisdictions were states/provinces of Canada, while six were North American.

    Saskatchewan was the top-ranked jurisdiction overall, followed closely by British Columbia and Ontario. Northwest Territories and Manitoba were the other AAA-rated Canadian jurisdictions and Alaska provided the US’ AAA-rated contribution. Only two of the 18 Canadian provinces

    Investment Risk Index: AAA-rated jurisdictions Jurisdiction Rating Legal Governance Social Fiscal Infrastructure Total

    Saskatchewan AAA 83 93 93 64 86 85

    Brit Columbia AAA 86 89 90 63 88 84

    Ontario AAA 85 89 91 64 85 84

    Sweden AAA 71 93 79 81 94 81

    NW Territories AAA 80 88 94 60 64 81

    Manitoba AAA 80 83 91 60 82 80

    Alaska AAA 80 93 80 63 60 80

    Author: Chris Cann, head of Aspermont Research & Intelligence.

    “The overwhelming conclusion from this research was North America, and Canada specifically, is the safest place t