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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (18058)	4/19/2008 10:26:05 AM
From: LoneClone	Read Replies (1) \| Respond to of 193039

Exploration future lies in small, midsize segment, but with many obstacles Chile's potential for future mining projects is concentrated mainly in the small and midsize mining sectors that are growing at phenomenal rates, according to industry experts present at the 2008 Expomin trade show underway in Santiago. "There is great potential here," Jaime Perez de Arce, executive VP for Chilean state-owned copper producer Enami told. Enami's role is to support miners too small to own processing plants by buying ore from them and processing it. According to Perez de Arce, last year the amount of copper ore Enami bought from miners jumped to 4.23Mt from 2.54Mt in 2006 and 1.39Mt in 2005. Meanwhile the value of the ore catapulted to US$336mn in 2007 from US$217mn the prior year and US$76.6mn in 2005. Although the figures spell out great potential for small and midsize mining growth, Perez de Arce warned the potential is precarious. Miners that depend on Enami should take note that the company is severely overstocked and could continue producing at present rates for more than a year without having to purchase new ore, he said. Plus, if copper prices fall, smaller miners will quickly vanish just as rapidly as they appeared, the executive added. But not only smaller miners see the tinier projects in Chile as an opportunity. Though most of the industry considers Chile to be at the mature end of the globe's mining districts, global giant Rio Tinto (LSE: RIO) has also taken notice of the promise of Chile's small and midsize deposits. "There are still opportunities," but not much for finding large-scale deposits, Rio Tinto Chilean explorations manager Arturo Correa said in a presentation at the X Expomin International Congress. EXPLORATION ENTRY BARRIERS Even if the future target of Chilean exploration seems clear, the nation presents many entry barriers for smaller players, including a lack of geological information to facilitate the task and available venture capital, said Alejandro Vio Grossi, director of Chile's national geological service Sernageomin. Former Codelco executive president and current chairman of junior Apoquindo Minerals and Hochschild Mining Chile, Juan VillarzÃº, agreed with Vio Grossi. VillarzÃº said in his speech at the Expomin congress that Chile's mineral claims are highly concentrated in the hands of global giants that are reluctant to part with them because permits are inexpensive to maintain. The absence of venture capital, along with the other factors mentioned, has created a trend difficult to break in which smaller miners are mostly dependent on an overstretched Enami while majors dominate both production and exploration claims. According to VillarzÃº, only roughly 5% of Chile's copper production is contributed by the small and midsize segments of the industry, although juniors have a much higher participation in exploration despite the small amount of claims they possess. – BNamericas