KUALA LUMPUR, Feb 20 — Despite its poor ore reserve sustainability regionally, Malaysia offers Asia’s best investments in mining after Australia, according to the latest industry report by BMI Research.

The Fitch Group unit attributed Malaysia’s strength to its stable and positive business environment, which earned it a score of 62.5 on its mining risk/reward index compared to Australia’s score of 72.3.

BMI Research noted in its report that the government shows keenness in stimulating capital flows and "hosts an attractive mining legislative framework.”

"The country's policy continuity is strong, and most exports of ore and concentrates from Malaysia do not have any export duty.

"Access to funding and international networks is commendable, which is an important factor investors consider,” it added.

In noted that other emerging markets in Asia, notably Laos, Myanmar, and the Philippines will not be able to meet market expectations due to weak mining reserves, poor regulatory framework, corruption and increasing resource nationalism.

Globally, BMI said Europe scored best on its mining industry risk/reward index.

Asia was second place but stood out in terms of having the largest mining sector size globally and the lowest labour costs.

BMI expects miners will be cautious in their future projects due to the gradual recovery of mineral prices in the coming years and will invest in countries where they can be rewarded with high value minerals and mines with long lives while considering government incentives to the sector.