MINING in Malaysia is not the big business it used to be. Tin mining tycoons are now corporate folklore, no thanks to the collapse of the global tin market in 1985.
The industry was then overshadowed by industrialisation and the oil palm industry. Its glorious past is manifested by the oil and gas industry which is the multi-billion ringgit industry it deserves to be due to planning and the work undertaken by Petroliam Nasional Bhd.
Apart from oil and gas, minerals are being mined by small-time miners in a rather ambiguous manner in most mineral-rich states. But that is about to change. The sector is now focusing on large-scale mining of major minerals such as gold, iron ore and coal. It’s no longer the domain of tin.
Last year, iron ore topped other major minerals in terms of production with 10.7 million tonnes mined valued at RM2.02bil. That is followed by gold with 4.6 million gm (RM700.8mil), coal at 2.95 million tonnes (RM442.2mil) and tin-in-concentrate at 3.66 million tonnes (RM236.5mil) respectively.
Furthermore, it’s no longer the purview of locals. There has been strong involvement by foreign investors, either indirectly or via stratagic joint ventures with domestic players in recent years.
Given the capital-intensive nature of the sector, raising the much-needed capital has been the biggest hurdle in the development of the mineral resources and mining sector in Malaysia which is said to have mineral deposits valued at RM336bil at current market prices.
“The past decades of lull in the mining industry had resulted in the slowing down of supplies in metals. The imbalance in the supply-demand curve thus pushes prices up, encouraging the exploration and development of new mining projects.
“This is perhaps the most exciting time in the history of the mining industry,” says Malaysian Chamber of Mines (MCOM) executive director Muhamad Nor Muhamad.
The local mining scene in Malaysia in recent years has been dominated by foreigner players or joint ventures with locals with deep pockets.
There are now 98 iron ore mines, 15 gold mines, 14 tin mines and seven coal mines in operation in the country.
Despite the encouraging growth in the mining sector, many feel that the disclosure over the handouts of mining leases, concessions, exploration permits as well as the scale of existing mining companies’ operations, profitability, mining royalty and taxes still lack transparency. Details are strictly kept from the eye of the public.
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