The general risks for companies come in many guises from commodity-price volatility and access to capital, to environmental concerns and social issues. How these manifest varies from jurisdiction-to-jurisdiction and then region-to-region.
Both general risk trends and jurisdiction-specific threats are covered by the Mining Journal World Risk Report (feat. MineHutte ratings).
The 2018 report has just been published and shows a marginal softening of global risk as measured by the year-on-year averages for constituent jurisdictions.
This year's Investment Risk Index within the WRR was made up of 96 jurisdictions. This is up from the 85 addresses covered in 2017 and the result of nine jurisdictions from last year falling out because of a lack of data and 20 new ones being added. We expect to comfortably clear 100 jurisdictions in 2019.
The fact the average risk level was flat according to the Investment Risk Index would surprise many who have been following events in the DRC, Tanzania or perhaps even the shifting social, political and legislative sands of Turkey.
This is the nature of high-profile changes for the bad in terms of risk in mining: they create headlines and focus attention away from incremental improvements in other jurisdictions.
Africa was, year-on-year, the region with most of the significant risers and fallers on the index. Though Tanzania and the DRC registered significant falls in their ratings, Burkina Faso, Guinea, Mali and Mozambique were all up by between 10-15%. Little has been made of these improvements.
The problems in Tanzania and the DRC are well known but some interesting trends have emerged in our analysis in terms of how the industry perceives the threat. More detail is provided around this in the WRR. Similarly, more information on exactly where the world's biggest improvers have made up ground is also made clear.
More generally, the level of Business Risk has been assessed as relatively low compared to Operating Risk, though the ability of professionals to manage Business Risk was assessed as limited compared to Operating Risk.
Further, the spectrum of results in both these groupings was extreme, particularly with Operating Risk. Here, there was an obvious problem with the competence and confidence levels among industry professionals in coping with the softer risk issues around regulation and social obligation/reputation.
Access to the World Risk Report is available here. Premium subscribers are able to view the full report, while an excerpt including the overall Investment Risk Index ratings and methodology is available for free.
