By Alan Fein
(AXcess News) New York - Mining projects are on the rise in Chile which comes as no surprise to Andina Minerals Inc. (TSX.V: ADM) President, Carl Hansen, who says "Chile is the mining country of South America, not unlike how Canada is looked upon." Andina is one of many Canadian junior mining companies exploring Chile's vast mineral deposits in a country that's open to outside investments with no less restriction than in Canada, Hansen explained.
Last week, another Canadian mining company, Dorex Minerals Inc. (TSX.V: DOX), announced that it completed Phase I drilling at its Carmelita property located within the IOCG belt of the Atacama Desert, Chile. Dorex is betting that its Carmelita property will show significant IOCG discoveries of copper-gold deposits associated with structures along the Atacama Fault Zone, whose main trend passes 5km west Dorex's property. But technology also played a role, Dorex notes.
A magnetic survey indicated the property worth exploring further. After Dorex sampled the Carmelita property in 2006 it optioned it for purchase in March 2007 and readied for Phase I drilling this year. Now it awaits those drill results.
According to the U.S. Geological Survey Yearbook, 2002, Chile had already grown into the world's largest copper producer and exported $7.6 billion in copper alone, accounting for 34.2% of all exports during a year of historically low copper prices. The Survey noted that the ore of the Atacama Desert is of high-quality and low cost to mine in part due to the dry aired conditions found there.
But dry conditions aren't the only thing attracting mining companies to Chile. Bloomberg reports that Sumitomo Metal Mining Co., Japan's largest nickel smelter, is increasing efforts to develop copper and nickel mines overseas because of rising ore costs.
The company needed to build more smelters in mining nations to lower the risk that governments may curb ore exports, Sumitomo noted.
With Sumitomo looking to invest $1.36 billion (US) over the next three years in foreign mining and smelter development, ICOG prospects in Chile will find a willing buyer in Japan's largest smelter.
The Bloomberg story quoted Daiwa Institute of Research analyst Takashi Murata who said, "Given tighter mine supplies and lower grades of copper ore, smelters are concerned about the risk that they may not be able to secure enough supplies and that processing fees may decline." Sumitomo noted that it had to raise the amount of copper ore it smelts from its own source supplies from 40% currently to over 67%