Zinced metal lion with 2 tails in front of the Trade Centre in Oradea, Romania (Mihai Bogdan)
Ireland is basking in brilliant sunshine. Above are blue skies. A blocking high pressure system is squeezing heavy rainclouds over Paris. Dublin is warmer than London! Jaypers, the patrons are squinting in the rays and drinking outside on the footpath. Sunshine is not good for Guinness. The black pint is better in dark musty pubs. It seems every dog has its day in the sun even an Irish summer. And so zinc the basest of metals is on the up, rising 23 % so far this year and just $18 short of $2,000 per tonne. Goldman Sachs last week announced that it likes zinc more than copper. This is making me reconsider my bullish outlook on zinc. Just joking. The sun is out the zinc price is up and the Whitsuntide bank holiday has arrived. Happy days! The future is so bright I must wear shades.
Europe is not taking responsibility for the sustainability its mining industry. That sustainability means discovery of new mine economic deposits. It also means long term supply of metals to support its modern civilization. Europe consumes much more metals than it produces. It can supply only a fraction of its needs. The annual EU deficit in metallic minerals supply alone is €10 billion per annum. It is no longer an option just to import. Europe must now compete with voracious consumer markets in China and India. There means very low risk of higher prices for these imports.
Metals and industrial minerals are vital to tens of millions of EU jobs. They feed or support, directly and indirectly almost every production and processing sector in Europe. Europe needs an effective strategy and not just talking shops. Accelerating global development will lead to even greater strain on raw material supplies in the future. We will look back on the current depressed markets for metals as a curious aberration in years to come.
There are almost 15,000 enterprises in the European Union metals sector. This includes mining, processing, smelting, recycling and other operations. They produce metallic raw materials for European manufacturers turning over more than €225 billion. There are maybe 30 million EU jobs depending on the availability of raw materials. There is a Euro 20:20 strategy. The EU has a target for industry to contribute around 20% of its GDP by 2020. Players and actors will have to stop talking and start acting soon. This 20:20 is no longer a long-term strategy but it is now a medium term strategy which has crept up on us.
A mine is where you find it. You cannot it move it if you do not like the fiscal package or if there a coup d’état. It is not like a technology or pharma company in that respect. As such mines sustain remote and rural communities until ore exhaustion. The trick is to provide something sustainable for the community once the mining stops. Research and technological innovation is great. But you cannot make new discoveries without drilling holes and you need money to drill holes. The best thing the EU could do is get out of the way and give 100% tax write off to investors in companies which explore for new deposits in Europe. They will get it all back once the revenue start flowing. Look to Canada and copy the best.
The European Innovation Partnerships (EIPs) is apparently a new approach to research and innovation. It plans to bring together actors from the entire raw materials value-chain. That is what it says on the tin. Commendable but wonder Boris wants to Brexit. The idea is to help ensure sustainability of raw materials to the European economy. A thriving sector would secure employment in the sector and provide new jobs. I was never sure how governments created jobs. I am sure how they can wipe out jobs.
For some reason I was an invited as a speaker on May 20th in Dublin at a round table on Irish mining. The centrepiece was a Strategic Plan of the European Innovation Partnership on Raw Materials. How can a sustainable mining sector contribute to the Irish economy and industrial growth? Indeed. Maybe get some holes drilled.
Ireland was the 10th largest producer of zinc in the world not that long ago. Mines were built on discoveries in an ore field which is the richest zinc district in the world based on zinc per acre. In Ireland we now have only one zinc mine left in production. In my view there is no other greenfield zinc project in Ireland, – the number can be counted on a mutilated hand – which could be in production in less than seven years. It is a (EU) permitting process think like ordering a meal in Michelin-star restaurant. You affect a leisurely approach to quality. But when you are hungry you need a fast-food outlet. The food might not melt in your mouth but it is fast and you will not be poisoned. The developing world is hungry. Europe’s prefers French cuisine.
If Boliden’s Navan Mine cannot sustain itself by developing a relatively new and much deeper ore zone then Ireland will have the same zinc production as Monaco. Once the substrate of an indigenous mining industry goes you lose the training-pipeline of young exploration geologists and mining engineers. Romania is a good example of a lost mining generation. If we believe that a nation can flourish as a service provider to the international mining industry without a domestic mining industry then we are deluding ourselves.
John P. Barry
Managing Director of Irus Consulting Ltd. and Professional Geologist
A widely travelled and highly experienced economic geologist, John Barry is a confidential counsellor to the likely investor contemplating a considerable investment in the intricate business of mining metals. Dont take a flyer and trust altogether in luck and invest your money in an exploration or mining project on the strength of a printed prospectus or the advice of an interested friend without the preliminary investigation and site visit of a reliable geologist with a basic grasp of commerical reality. Irus Consulting provides strategic and practical management advice and guidance to its clients. Time is a precious commodity for my clients, and indeed myself, as it relentlessly ebbs away and so I try as best I can to avoid the mediocre - those projects and their champions which do not engender enthusiastic belief and passion.
Irus Services Include:
- High-level strategic advice
- Practical guidance and assistance on project sourcing, acquisition and implementation
- Rapid identification of key project value-drivers and potential fatal flaws.
- Capacity building and coordination of external consultants.
- Design and targeting of effective marketing campaigns
John Barry was part of very small teams which discovered and sourced several multi-million ounce gold deposits in Africa. He has worked as an economic geologist since 1988 and as a consultant and then responding to the entrepreneurial spirit he was a founder and manager of three public resource companies which raised a total of US$70million. These resource companies are currently successfully exploring and developing gold and base metal projects in Europe, and sub-Sahara Africa. John has seen a lot of rocks working for consultancies such as CSA in both Ireland and Australia and as Senior Associate Geologist with Chlumsky Armbrust & Meyer LLC which is based in Denver. He is a specialist in zin-lead exploration and in 1992 joined the exploration team which discovered the Lisheen zinc-lead deposit in Ireland as the resource was being expanded in the first couple of years after discovery and in 2008 led the first non Polish exploration company to successfully enter and acquire a major resource-project in the Upper Silesian Mississippi-Valley-Type (MVT) zinc-lead district in southern Poland the worlds largest minerlised district of its kind. John (P.Geo and EurGeol) holds a Masters Degree in Geology from Pennsylvania State University and a MBA from the Edinburgh School of Business, Heriot-Watt University, Scotland.
I would like to think that I have shown the tenacity, patience and focus required to implement many of my better ideas over the years and that I have learned valuable lessons from some failures. I believe one of my strengths is in communicating quite complex technical ideas in a concrete way that can be easily understood. I am a team- builder and motivator by projecting my enthusiasm and vision for a project. I am committed to the development of young geologists through supportive delegation. John is now moving more from managing public companies to freelance consultancy and a more advisory role so as to concentrate increasingly on assisting management in effective exploration and discovery. He is Managing Director of his own Exploration Management and Geological Consultancy: Irus Consulting Ltd. Please visit www.irusconsulting.com for more information and free newsletter registration.
John is now moving more from managing public companies to freelance consultancy and a more advisory role so as to concentrate increasingly on assisting management in effective exploration and discovery. He is MD of his own Exploration Management and Geological Consultancy Irus Consulting Ltd.