With confidence seeping back into the global mining sector it’s inevitable that companies will once again start to look at exploring for new reserves, and most likely come to some uncomfortable realisations.
The choice facing both major and junior mining companies is increasingly bifurcated; either work in relatively risk-free countries and chase expensive and dwindling deposits, or go to frontier markets and take on uncertain regulatory environments, challenging conditions and quite often corrupt officials.
While traditional mining powerhouses like Australia, Canada and Chile still offer opportunities, mining companies are under no illusion about the high cost of operating in these jurisdictions and the relatively low chances of scoring a major new deposit.
Rather the next large reserve of minerals such as copper, zinc, cobalt and others is likely to be found in places that are hard to do business in.
Africa is often cited as a continent filled with promise, but outside of countries with existing mineral sectors, such as South Africa and Zambia, it may just be too tough for many companies. Step forward Kazakhstan, already a major producer of zinc, copper and other minerals, and a country that offers opportunities for those willing to take risks.
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