INTERVIEW: Japan's Mining Agency Ups Exploration Budget 50%
Monday, June 02, 2008; Posted: 01:50 AM
tradingmarkets.com
SINGAPORE, Jun 02, 2008 (Dow Jones Commodities News via Comtex) By Matthew Walls Of DOW JONES NEWSWIRES
Japan's state-run Japan Oil, Gas and Metals National Corporation has been given nearly 50% more for its metals exploration budget in 2008, a senior official said Monday.
The bigger budget will allow JOGMEC to increase its exploration expenditure for rare metals and uranium, Naotaka Adachi, director of JOGMEC's metal strategy department, told Dow Jones Newswires.
JOGMEC's exploration budget for the financial year starting April 2008 was raised by Japan's government to approximately Y4.4 billion, or $42 million, up from approximately Y3 billion in 2007.
JOGMEC is Japan's only state-owned body involved in securing mineral resources for the resource-poor country, which is heavily reliant on mineral imports to feed its manufacturing industry.
The increase in its budget comes at a time of growing resource competition among the fast-growing countries in Asia for the world's energy and mineral deposits.
Adachi said JOGMEC hasn't changed its strategy in the face of competition from state-owned mining companies or sovereign wealth funds which have been taking stakes in projects or have bought out mining companies active in South America, Australia, Asia and Africa.
Its biggest challenge at the moment is the "increased difficulty of discovery and deepening discovered deposits," Adachi said.
One of its newest mechanisms to secure more overseas mineral production are joint venture projects, which it began establishing with foreign governments and companies in 2003.
JOGMEC provides financing and exploration expertise to a grassroots project and acquires an option for an equity stake in its partner. For successful projects, the equity stake is normally transferred to a Japanese mining and metal company. The joint ventures normally have a budget between $100,000 and $1.5 million.
In 2007, JOGMEC had 22 joint venture projects around the world, most of them in the Asia-Pacific region, and is considering establishing new joint ventures and moving for the first time into Africa.
"Africa is one of (JOGMEC's) target areas and project generation is under progress," Adachi said.
In May, JOGMEC signed a memorandum of understanding with Brazilian mining major Vale (RIO) to cooperate on remote sensing exploration in southern Africa, focusing on platinum group metals, nickel and zinc.
JOGMEC signed its latest joint venture in March, agreeing to provide $4.5 million over three years to Australian miner Southern Gold for the exploration of zinc and copper in Cambodia, with an option to take a 51% take in the miner.
JOGMEC also conducts overseas geological surveys with Japanese mining companies, or provides financial support to Japanese companies conducting exploration.
Adachi said JOGMEC is actively exploring in Chile, Brazil, Peru, Argentina, Indonesia, the Philippines, Cambodia, Australia and Canada.
It has also begun financing the exploration of low-grade copper deposits, which could be mined if a JOGMEC bacterial leaching processing technology becomes feasible, Adachi said.
JOGMEC hopes this technology will open up more deposits for Japanese companies to process, at a time when mining companies around the world are struggling to find high-copper content deposits.
Adachi said JOGMEC is still exploring in Indonesia, although it is concerned about the Indonesian government's plan to reduce the amount of land any company can hold for exploration. There is a "possible negative impact for exploration," Adachi said.
He added JOGMEC ended a gold exploration partnership with Indonesian miner PT Antam after a disappointing technical evaluation.
-By Matthew Walls; Dow Jones Newswires; 65-6415-4082; matthew.walls@dowjones.com
(END) Dow Jones Newswires
06-02-08 0150ET |
