Though Wisconsin has a rich history of mining, current perceptions of the state’s regulations and the administration of those regulations makes that history seem mythical. The state’s current reputation makes it one of the least likely mining sites in the world.
Since 1997, the Fraser Institute has conducted an annual survey of metal mining and exploration companies to assess how mineral endowments and public policy factors such as taxation and regulation affect exploration investment. Survey results represent the opinions of executives and exploration managers in mining and mining consulting companies operating around the world. The survey now includes data on 79 jurisdictions around the world, on every continent except Antarctica, including sub-national jurisdictions in Canada, Australia, and the United States.
Overall, the 2010-2011 report concludes that “the bottom 10 scorers are Indonesia, Zimbabwe, Wisconsin, Madagascar, India, Guatemala, Bolivia, DRC (Congo), Venezuela, and Honduras.” Of those areas, the report notes that: “Unfortunately, except for Wisconsin these are all developing nations which most need the new jobs and increased prosperity mining that can produce.”
With respect to the current mining legislation debate, the most pertinent questions posed relate to the impact of regulations and the administration of those regulations. The five options for answers were whether the factors: 1) Encourages investment; 2) Not a deterrent to investment; 3) Mild deterrent; 4) Strong deterrent; or, 5) Would not pursue investment due to this factor. The graphs below reflect the worse ten jurisdictions by adding the “strong deterrent” and “would not pursue” answers.
Of all 79 jurisdictions included in the survey, Wisconsin is the jurisdiction where regulations were the most severe deterrence to investment.
The state can address, at least in theory, the impediment for investment due to our regulatory programs through legislation such as AB 426. However, the implementation of the state’s laws is just as important as the letter of the law.
Figure 1: Environmental Regulations
Administration of Regulations
A perception that the government does not fairly or predictably enforce its laws raises concerns that legislation may not be able to address. Unfortunately, Wisconsin also scores badly in this area. Of all 79 jurisdictions included in the survey, only Hugo Chávez’s Venezuela is ranked worse than Wisconsin in its administration of its laws.
Figure 2: Uncertainty Concerning the Administration, Interpretation, and Enforcement of Existing Regulations
Although the state has a poor reputation in the global mining community, Wisconsin today has an opportunity to permit the largest iron mine in the state’s history. The reforms to Wisconsin’s ferrous mining law contained in Assembly Bill 426, coupled with the Department of Natural Resources’ commitment to helping businesses in the state navigate the permitting process, presents an opportunity for Wisconsin to improve its reputation with the international mining community before the next Fraser Report is published.
This post was authored by Robert Fassbender and Emily Kelchen.