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FOCUS – SPAIN & PORTUGALTurbulent times in IberiaWith Spain and Portugal’s economies still mired in difficulties, a revival of the Iberian miningindustry could be exactly what the region needsFAST FACTS: SPAIN/PORTUGALCapital:Madrid/LisbonPopulation:46.7 million/10.7 millionCurrency:Euro/euroGovernment type: Parliamentary monarchy/RepublicGDP real growth rate: - 3.6% (2009)/-2.8% (2009)THE Iberian peninsular (Spain and Portugal)has long been a significant European miningcentre, and was the world’s first modernproducer of iron, lead, zinc and copper(in the late 19th century).However, in the past few decades, mine productionhas begun to decline, and the contribution of Spain’smining industry has halved from 0.6% of the country’sGDP in the 1990s to just 0.3% in 2009.The industry has been hampered by resourcedepletion, technological problems, low metal pricesand environmental problems, among other factors.More recently, the global recession has furtherthwarted mine development. Spain was the last,and the slowest, major European economy to exit therecession, recording growth in the March quarter thisyear for the first time in 18 months.The government has introduced a €50 billion(US$61 billion) austerity package to try andreduce the country’s deficit, which stood at11.2% last year (well above the European Unionlimit of 3%).Portugal’s financial sector, meanwhile, has beenrelatively insulated from the global financial crisis.Nonetheless, the government faces tough choicesin its attempts to stimulate the economy this year,after the country’s deficit reached 6.8% of GDP in2009.While Greece is still the only European economy tohave had its credit rating cut to ‘junk’ status, the worldis closely watching developments in Iberia.MINING POTENTIALBoth Spain and Portugal have a long history of mining,particularly from the Iberian Pyrite Belt (IPB), which isone of the largest massive-sulphide belts in the worldand stretches across the peninsular.Spain has a rich mining history, becoming the firstworld producer of many commodities, including iron,lead, zinc, copper, manganese and mercury.Mineral resources are state-owned, althoughthe direct participation of the state in the miningindustry has fallen considerably in the past few years.Currently, the state holds mining rights in only somestrategic sectors (including coal, uranium andhydrocarbons).Portugal has also previously been the largestEuropean producer of copper (1988) and tin (1990), aswell as tungsten, although today mining is limited to ahandful of operations, including Lundin Mining Corp’sNeves Corvo copper-zinc mine, which has been inoperation since 1989 and remains one of the largestproducing copper mines in Europe.MINE PRODUCTIONWhile mining in Spain and Portugal has been decliningin recent decades, the opening of four metal mines inSpain since 2005 has heralded a resurgence in thesector in this region.The region has limited resources of energyminerals such as coal, oil and gas, and while theseminerals accounted for 14% of Spain’s total mineralproduction in 2009, both countries rely heavily onimports.Spain has estimated coal reserves of 530Mt,according to the 2009 BP Statistical Review of WorldEnergy. The country produced 5.5Mt of coal in 2008,down 9.1% from 2007 and accounting for just 1.2% ofEuropean production and 0.2% of world production.Portugal did not feature in the list of the top 15European coal producers.Spain’s copper, nickel and tungsten production hasbeen increasing, however, with total production in 2009of 22,100t of copper, 7,800t of nickel and 270t oftungsten.The country’s metal production was valued at €290million in 2009, and is forecast to reach €767 million thisyear.Lundin’s Aguablanca nickel-copper mine in Badajos isthe most established of Spain’s new suite of metallicmines, having begun production in 2005. Last year themine produced 8,029t of nickel and 6,989t of copper, amarginal decrease from 2008 as the company deliberatelylowered mine production to reduce costs and blend inpartially-oxidised surface-ore stockpiles.The existing open pit at EMED’s Rio Tinto projectwww.mining-journal.comMay 21, 2010 Mining Journal 19

towards updating the historical resource estimate to aNI 43-101-compliant estimate.The Toral project also benefits from excellentinfrastructure, Goldquest said, including access to amajor regional highway, a nearby high-voltage powerline and a rail line that links to the Asturianas zinc-leadsmelter via the city of León.STRATEGIC MINERALSIberia is also host to some strategic mineral deposits,including uranium, rare-earth elements and lithium.The most extensive of these have been identified inthe Salamanca and Extremadura provinces in westernSpain, extending across the boarder to Portugal.Berkeley Resources Ltd has extensive land holdingsin Spain, with advanced uranium exploration projects inthe Salamanca, Caceres, Guadalajara, Toledo, Barcelonaand Lleida (Lerida) provinces.In May last year, the company commenced afeasibility study at its flagship Salamanca project, whichis expected to be completed by the end of this year.In March, the company announced a resourceestimate for the project comprising 5.6Mt at 403ppmU 3O 8 in the measured category, 18.9Mt at 491ppm U 3O 8in the indicated category and 56.6Mt at 441ppm U 3O 8 inthe inferred category.A scoping study for the Salamanca I project, in 2008,identified the project had potential to produce 12.1Mlbof U 3O 8 over a ten-year mine life, at average operatingcosts of US$25/lbMeanwhile, The Geological Survey of Spain ispreparing a systematic research strategy to explorestrategic minerals (including rare earth-elements andlithium) in adequate geological settings employing theexisting knowledge, occurrences and geochemicalanomalies databases, and following the trendsestablished in the EU Raw Materials Initiative.FUTURE PLANSSpanish mining is still important at a European, if not aworld, level. Yet, in spite of this, it is not able to supplythe domestic market with a number of resourcesincluding energy minerals, metallic ores and a numberof industrial minerals.Yet Spain is anticipated to continue to have oneof the most important and diversified mining sectors inEurope, particularly in industrial minerals, and to onceagain become a substantial European centre for copperproduction.Furthermore, rising metal prices and strong demandfrom emerging countries (especially China and India)has encouraged investment and exploration in to newmining projects across Iberia, which in the short termcould become an important producer of base metals,gold, tungsten, tin and uranium.In addition to greenfield exploration, Iberia hosts arange of disused mines that were closed not as a result ofresource depletion, but owing to falling metal prices. Thedevelopment of new technology in the mining industrycould yet make these disused mines economicallyfeasible.In this regard, the Spanish Geological Survey isworking to develop a database of modern and detailedgeological, geophysical and metallurgical information,to provide consulting and technical services for theexploration sector.Above all, a liberal mining legislation, a good climateand excellent communications and the availability ofexperienced, trained and qualified staff, makes Spainand Portugal countries with strong investmentpotential in the mining sector.This report is based on a contribution from the GeologicalSurvey of Spainwww.mining-journal.comHeemskirk Los Santos tungsten minePortugal-based MTI – Ferro de Moncorvo SAowns the iron-ore deposit at Moncorvoin the north of the countryThe Moncorvo deposit is a huge proved-probable reserve, with a total of 563Mt of oreaveraging 37% Fe for open-pit exploitation, and inferred resources of 2,000Mt. Work at themine was suspended in the 1970s because of political uncertainty following the Portugueserevolution of 1974, the low iron-ore price, lack of investment in technology research inEurope for this kind of ore, and other problems of that time.Iron province of NW IberianPeninsulaThe site incorporates, within 10km, twohydroelectric dams, the Douro river (whichcan take ships of up to 2,500 tons) and arailway. It has electric power and gas insidethe concession, and water supplies just 2kmaway.Under the leadership of the prestigiousgeologist, Acúrcio Parra, MTI – Ferro deMoncorvo’s technical team has concludedthe prefeasibility study successfully.Geological interpretation of magnetic andgravimetric data and inferred iron resourceswww.mti-geo.comThe deposit occupies an area of46km2 in public land dedicated tomining activity. Agreement for iron-oreprospecting and research was signed bythe Portuguese State in February 2008,valid to February 26, 2013.The same agreement declares thatwithin the five-year period, MTI –Ferro de Moncorvo can seek a 30-year definitive concession to exploitthe deposit (through two 15-yearextensions). The company will thisyear ask the Portuguese State for theexploitation concession.Geology with measured and indicated iron resourcesProduction from the Moncorvo open pitwill be a fine pellet feed with 67.8% Fe, lessthan 2% SiO2 + Al2O3, and 0.03% to 0.08%P. The concentrates will have 15% to 20% ofmagnetite and 0.66% of ignition losses. Themetallurgical testes were made by CETEC(Brazil) and Coloraine Minerals ResearchLaboratory (US).May 21, 2010 Mining Journal 23

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