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You won’t find a region with a longer and richer mining history than Andalucia.
Digging up rocks has been a staple of the southern Spanish territory for the past 5,000 years, and its mineral wealth attracted the Phoenecians, Romans and many others over the centuries. This is the place that gave birth to mining giant Rio Tinto Ltd., and its namesake copper mine may be the oldest in the world.
But these days, everything feels brand new. Just 20 kilometres from the city of Seville (and more than 700,000 people), Inmet Mining Corp. is beginning to reap huge rewards at Las Cruces, a copper mine that has been running for just three years and boasts some of the industry’s highest grades. In the midst of the excruciating Andalucian heat — which doesn’t seem to bother locals in the least — the Toronto-based company has overcome a rough start and figured out an innovative process to produce copper cathode.
While other miners have ventured to distant outposts in search of riches, Inmet is making it work in what is arguably the least remote mine on the planet. A short drive away, the ancient Rio Tinto mine is being revived with a new company and modern technology. And across Spain, a host of new projects points to a reawakening of mining in a country that could never turn away from it, even if it appeared to be doing just that for the past 30 or 40 years.
In many of the world’s emerging mining hotspots, things are going about as badly for the companies as they could possibly go. Miners are facing randomly changing laws in Mongolia and Argentina, onerous windfall taxes in Ecuador and Ghana, and violent protests in Peru. It is hard to find an emerging jurisdiction anywhere in which mines are operating smoothly these days.
Lost in all that noise is the fact that the tired old continent of Europe, and particularly southern Europe, is making a quiet revival as a mining jurisdiction, one that is free from the chaos striking many emerging markets.
European countries that had little time for the sector in recent decades are becoming staunch supporters, as their debt-strapped governments are desperate to create jobs and draw new investment. The ones with the worst fiscal problems (Spain and Greece) are embracing it the most.
It is not just about jobs either; there is a growing recognition in Europe that the continent needs a healthy home-grown mining industry to ensure security of supply. Europe relies on Africa for natural resource supplies, but is now facing massive competition on that continent from China, India and other resource-hungry nations.
“The bottom line is that Europe has come alive for mining, from a policy level from Brussels and all the way through to the administration of individual provinces,” says Harry Anagnostaras-Adams, managing director of EMED Mining Public Ltd., active in Spain, Cyprus and Slovakia and leads the restart of the Rio Tinto mine.
The companies that have taken the plunge into Europe have slowly rediscovered the benefits of working in a stable environment with plenty of first-world benefits. In essence, it’s the anti-Congo.
“You have a very strong and stable government; you have probably the best infrastructure in the world; you have a huge and talented workforce right there, and you’ve got pretty standard taxation rates,” says Cary Pinkowski, chief executive of Vancouver-based Astur Gold Corp., which is developing the Salave gold project in northern Spain. “What we’re finding, especially in South America, is they’re changing the rules of the game every week.” (Ironically, he was in Spain when Repsol SA’s Argentine business was expropriated).
Pro-mining voices are becoming increasingly loud in countries such as Greece (where Eldorado Gold Corp. is developing long-stagnant projects) and even Romania (where Gabriel Resources Ltd. is finally getting some encouraging signals for its controversial Rosia Montana mine).
For the rest of this article, please go to the National Post website: http://business.financialpost.com/2012/06/01/can-mining-save-spains-economy/