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Latin America to get lion's share of mining
NEW PROJECTS
METAL mining companies plan to spend $34-billion on new mines and expansion projects, with Latin America earmarked for the lion's share and copper the favoured commodity. An analysis by Mining Journal says spending is to be spread over an average of three years, indicating median annual capital expenditure of $10-billion. Latin America is set to account for 42% of the total, or $14.3-billion. Copper will account for 54% of expenditure, or $18.5-billion. Mining Journal calculates that planned capital expenditure by the industry has jumped by 80% compared with the projection in a similar study 30 months ago. In the latest survey, gold accounts for $8.3-billion or 24% of planned expenditure, but Mining Journal says the recent steep fall in the gold price "will result in the deferral or cancellation of many precious metals projects". The plans were made before the Bre-X gold scandal erupted in April, causing investors to shy away from mining and making it difficult for small mining companies to raise new capital. Bre-X, a small Canadian mining company, saw its share price jump after it announced it was developing what promised to be the world's biggest gold mine in Indonesia. However, tests showed that gold samples had been faked and Bre-X's shares collapsed. The third-ranking commodity is nickel, with 13% of planned expenditure. As for geographic regions, North America takes second place, but with less than 17% of the total, or $5-billion. There is little difference in planned expenditure in Africa, Asia and Australasia: each has about 14% of the total. There is little mining expenditure set for Europe and two thirds of the identical total is allocated to one project - the Lisheen zinc project in Ireland, being developed by Ivernia West of Ireland, and SA-owned Minorco. Mining companies are shunning former eastern bloc countries - only small gold projects are planned for that region. In the past 30 months, the number of projects expected to cost more than $500-million has nearly doubled and accounts for $19.6-billion of the total, or 57%. Six projects will cost more than $1-billion. They are:
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