Determinants of Foreign Direct Investment in the Mining Industry
A range of social, political, and economic factors determine where mining companies invest their scarce capital. This chapter identifies nine areas of risk that investors need to consider before investing in the sector. These include high sunk costs, the finite life of a deposit, and the long period to achieve a positive financial return. Add to this, legacy issues and it is clear that mining is a high-risk venture. This chapter argues that increased attention to the nine areas of risk may benefit mining companies in the future.
Bilateral investment treaty
Extractive Industries Transparency Initiative
Environmental Performance Index
Foreign Direct Investment
Geographical Information System
Guided Uniform Criteria Assessment System
International Centre for the Settlement of Investment Disputes
Internal Rate of Return
SNL Metals Economics Group
Net Present Value
Prime Minister’s Science, Engineering and Innovation Council
United Nations Conference on Trade and Development
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