http://www.bloomberg.com/apps/news?pid=20601082&sid=a4ceOfIUxBuc#
By Rob Delaney
June 10, 2008 (Bloomberg) -- Mining companies including Cia. Vale do
Rio Doce and Xstrata Plc will spend 25 percent more this year on
exploration in Canada's Ontario province amid rising interest in
searching for deposits in stable nations, the government said.
Exploration expenditures in Canada's largest metal-producing province
may increase to C$629 million ($616 million) from C$502 million in
2007, said Marc Leroux, marketing manager with the province's Ministry
of Northern Development and Mines. Ontario produced C$10.7 billion of
metal, mostly nickel, gold and copper in 2007, according to the
ministry's data.
Mining companies, driven by copper and gold prices that reached
records this year, are seeking deposits in lower-risk countries as
governments in developing nations try to revise agreements to gain more
from their mineral wealth, Leroux said.
``Mining companies have come to appreciate the lack of political risk,
the rule of law, security of tenure, and all of the elements that
create a reliable investment climate,'' Leroux said in an interview
yesterday. ``We're expecting a lot of work to come in over the next 10
years or so.''
Freeport-McMoRan Copper & Gold Inc. said last week that plans to start
its copper mine in the Democratic Republic of Congo by the second half
of next year are at risk because of logistical difficulties and poor
infrastructure. Ivanhoe Mines Ltd., seeking to develop a copper and
gold project in Mongolia with Rio Tinto Group, has been negotiating
with the nation's government for more than five years.
The price of nickel, Ontario's largest mineral product by value, has
more than doubled in the past five years as economic growth in China
boosted demand for the ingredient used in stainless steel. Gold,
Ontario's No. 2 metal, has more than doubled in that period, and copper
has more than quadrupled.
Claims Rise
The number of exploration concessions claimed in Ontario's Sudbury
district, where Vale and Xstrata's largest Canadian operations are
based, rose 36 percent to 27,000 last year, according to the ministry's
data. Exploration spending in Ontario has risen from C$219 million in
2003, according to the department.
Vale announced in June 2007 that exploration drilling confirmed the
presence of copper and nickel deposits that may extend the life of a
106-year-old mine it controls in Sudbury. The Creighton Deep project
has the potential to almost double proven and probable reserves of
nickel and copper at the Creighton mine, Vale said at the time.
To contact the reporter on this story: Rob Delaney in Toronto at
robdelaney@bloomberg.net
