Eyeing off new mineral deposits

CHANGE: Shifting the company s investment in known resources to exploration of new mineral deposits in uncharted territory may be a trend in 2013.A HALT to pre-feasibility work on Glencore-Xstrata’s Mount Isa Open Pit (MIOP) project may mark the start of a trend in 2013, shifting the company’s investment in known resources to exploration of new mineral deposits in uncharted territory.

Incoming Glencore-Xstrata Chief Executive Ivan Glasenberg hinted at the shift after telling media he preferred emerging economies over established mining industries in Australia and Canada for the lack of fiscal restrictions imposed by their governments.

Queensland Resources Council (QRC) boss Michael Roche said each project in the North West would have to meet rigorous standards around costs.

Mr Roche said positive growth was coming out of projects like MMG Limited’s Dugald River project and the expansion at Xstrata’s Ernest Henry Mine, both outside of Cloncurry, but the region would need to continue to prove they were globally competitive.

“Global resource companies have a menu of options around the world and we need to re-double our efforts around making our projects the most attractive for these big companies,” he said.

“We can’t assume a project we think is good for our country will be at the front of the queue.

“The way to jump the queue is to make sure our cost structures are globally competitive.”

“The quality of the established resources being mined in the Australia and Canada remain important, but Mr Roche said it was likely to be the cost of extracting those resource that would have mining companies looking elsewhere to make big profits.

“In other countries their approval processes are quicker and tax rates are lower.”

“So, even if you’re comparing similar quality deposits we also need to compete on those other grounds.”

Mr Roche said he was concerned Tuesday’s federal budget announcements would add even more restrictions to mining exploration, a key activity in the North West’s mining future.

“We are worried about talk around the federal budget which could involve a hit on exploration, making it less tax effective and more difficult,” he said.

“We need to face the fact that it’s been some years since we’ve had a major new discovery in the North West.”

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