The Investment Risk Index (IRI) is the underwriting tool published within the Mining Journal Intelligence World Risk Report 2021 (feat. MineHutte ratings) and provides jurisdiction-by-jurisdiction ratings across five core areas necessary to consider when assessing mining-related risk: Legal, Governance, Social, Fiscal and Infrastructure. It applies a methodical and scientific approach by combining hard, established risk-related metrics with perceived risk to generate rounded and robust, year-on-year numbers for some 105+ jurisdictions.
Perceived risk is measured by the World Risk Survey, completed by more than 600 respondents, who have shared their insight into the risk landscape for their mining jurisdiction. The survey also asks respondents to assess the geology of their host jurisdiction, which we combine with our risk rating to measure the overall opportunity; and a review of the permitting regime, which is a key consideration but falls outside the measurables of the IRI. And finally, we ask respondents to assess global trends in Business and Operating risk in terms of both severity and then manageability to identify broader shifts in risk attitudes across borders. Each year we collect some 3,500 unique and aggregated data points, deepening the value of the database with every report published.
Methodology:
The Investment Risk Index ratings are built using a combination of 10 ‘hard risk’ metrics from established, risk-related indices – including MineHutte’s Regulatory Risk Ratings and Corruption Risk Index – and the accompanying ‘perceived risk’ score, established by the World Risk Survey that asks mining professionals from across the globe to provide ratings for a jurisdiction in which they have sufficient experience to take a considered view.
The hard risk metrics and perceived risk score are weighted 80% and 20%, respectively, and are assessed over five risk categories, which are also weighted: Legal (40%), Governance (25%), Social (15%), Fiscal (12.5%), and Infrastructure (7.5%). Jurisdictions accumulate a score out of 100, which corresponds with a rating from AAA, for those with negligible investment risk, through to D, for those with exceptionally high investment risk.
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