World’s Biggest Miner Speeds Hunt for Copper in ‘Last Frontier

 

24-jul-2017

BHP Billiton Ltd., the world’s biggest miner, has opened an office and is seeking to add staff in Ecuador as it advances a search for copper in a nation that’s becoming the sector’s exploration hot-spot.


Melbourne-based BHP’s local unit, Cerro Quebrado, will spend about $82 million on exploration, having established a base in the capital, Quito, and advertised for workers including a senior geologist. The value of Ecuador’s mining sector could rise to $7.9 billion by 2021 from $1.1 billion this year as major players arrive, according to Fitch Group’s BMI Research.


BHP joins Australian competitors including billionaire Gina Rinehart’s Hancock Prospecting Pty, Fortescue Metals Group Ltd. and Newcrest Mining Ltd. in establishing offices or adding exploration licenses in the nation, according to Rodrigo Izurieta, president of Ecuador’s Mining Chamber. The miners are attracted by expectations that the country holds major, undiscovered copper and gold deposits, and assurances that newly installed President Lenin Moreno will continue efforts to woo investment, he said.


“There is no doubt that the interest is increasing, so much so that we can talk about a new phase for mining in Ecuador,” Izurieta said by phone from Quito. “Ecuador is one of the world’s last mining frontiers, but it is under-explored and under-developed. There is a great window of opportunity.”

Miners are seeking new copper deposits as output wanes at existing projects and with demand for the metal forecast to surge from renewable energy, electric vehicles and urbanization in emerging markets. There’s a lack of developed projects and deteriorating ore quality at aging mines, Oscar Landerretche, chairman of the world’s biggest copper producer Codelco, said this month in an interview.


"Establishment of an in-country presence is under way including office space and local recruitment in Quito,” BHP said in a statement on its work in Ecuador. The producer has added five exploration concessions in the country, according to a filing last week.


BHP advanced 0.7 percent to A$24.56 in Sydney. Shares in London added 2.9 percent to 1,325.50 pence by 10:21 a.m. local time.


Ecuador had awarded 233 new exploration concessions at the end of June and companies have committed to spend about $474 million through 2021 on exploration, according to the mining ministry. About 80 percent of the concessions -- which have an average size of about 4,000 hectares (9,884 acres) -- have been awarded to Canadian and Australian companies, the ministry said in a March presentation.


“BHP will invest more than $82 million on initial exploration in five areas located in the province of Imbabura around Sabaleta and Santa Teresa," Ecuador’s Mining Minister Javier Cordova said in a message.

 

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