In a field near Saint-Pierre-Montlimart, a small hamlet with a turreted church in western France, Jack Testard and Patrick Lebret dig up some earth with an agronomic drill and put it in a plastic bag.
The president and the chief geologist of a French mining exploration startup owned by Australia’s Variscan Mines Ltd will send dirt samples from the field, which is in an area that was home to a gold mine until 1952, to a laboratory in southern France to look for “mineral anomalies” the company is betting will show evidence of the precious metal.
“There are a lot of attractive points to prospect in France,” Testard says, as he points to a map with yellow dots representing areas where traces of the metal have been found. “It’s a really interesting time to prospect gold because the price is higher than before” and extraction technologies “are much more modern.”
Although France hasn’t historically been a large producer of gold, soaring prices of the metal are bringing companies to its door. By granting the first exploration licenses in mainland France in more than two decades to Variscan, Economy Minister Arnaud Montebourg is trying to revamp the country’s mining industry and cut reliance on imports of metals such as rare earths critical for military equipment and renewable energy.
The French exploration push comes even as mining companies extend cuts in spending for a second year. Exploration spending plunged by 30 percent or $10 billion last year as budgets to search for minerals and sustain supplies were squeezed, according to MinEx Consulting Pty, whose clients include BHP Billiton Ltd., the world’s biggest miner.
Reviving History
Rising demand from China and other emerging markets has boosted prices for most metals, including gold. Bullion traded at $1,326 an ounce on July 1, up from $400 a decade ago. It peaked at $1,931 during the financial crisis in 2011.
The 186 metric tons of gold extracted in France in the last century is less than the current global monthly production, which was 225 tons in April, according to the World Bureau of Metal Statistics. France was also Europe’s third-largest producer of tungsten and zinc until its output stopped in 1986 and 1991, respectively.
In the 1980s, operators started shutting down mines as deposits of ores including uranium, lead and zinc were depleted or became unprofitable to extract. They also faced rising regulations and opposition from environmentalists after areas around some pits were polluted by cyanide used in extractions.
Exploration techniques have improved over the last three decades, which together with rising prices, makes it more appealing for companies to seek licenses, said Testard.
Toughened Regulations
“Prices of metals have risen and there’s been great progress in the modeling of deposits and in mineral processing, so France is becoming attractive again,” he said.
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