A mine located in Bosnia and Herzegovina may soon resume silver production, after a more than three-decade hiatus, following years of civil unrest. Paul Cronin, CEO of Adriatic Metals Plc, which is the mining company that will be handling this project dubbed the Vares project, reveals that the silver mine could begin production by next year’s end. This is part of an emerging trend that involves resuming operations in “zombie” mines that halted production due to various reasons including political unrest, owner bankruptcy or weak prices.
In an interview, Cronin, a former investment banker, stated that some of these mines, which were abandoned and are scattered across the globe, created potential environmental issues that need to be addressed. He explained that converting these unused and dumped mines into something that added value would help resolve some of these issues and allow shareholders to gain returns from them.
Over the last year, the price of silver has increased by roughly 40%, and this trend is set to continue given the metal’s use in electric vehicle charging stations and solar panels. This rise in demand for precious metals will be observed across the board. Mining companies from South Africa and Australia to Europe are being driven by the commodities price rally, which is influenced by the infrastructure spending associated with the clean energy transition and global economic recovery.
For instance, Anglo American Platinum Ltd., the largest platinum company globally in terms of market value, was recently approached by no less than three different groups regarding its Bokoni mine, which has been idle for quite some time. Cronin stated that by recycling old mines, companies could reduce their costs through the use of the existing infrastructure. This includes mines that haven’t been in production for more than three decades. He cited the example of the Vares project, which already had roads and rail links in place, noting that the company was using some of the site’s existing facilities.
Incorporating new technologies to already existing sites could also make these operations more economically viable. For example, Adriatic Metals is working to develop a zinc project in Siberia. Other mining companies getting involved with restarting operations at these mines include Mincor Resources and Panoramic Resources Ltd. Both companies are resuming production at their nickel operations after putting them on care and maintenance in 2016 following weak international prices.
In a feasibility study, Boss Energy Ltd. also revealed that its Honeymoon mine, which holds uranium and was closed in 2014 in response to weak prices, may resume operations in about 12 months.
The growing interest in zombie mines is a clear sign to mining industry players such as Excellon Resources Inc. (TSX: EXN) (NYSE American: EXN) (FSE: E4X2) that the foreseeable future is bright as metals prices are likely to remain steady or even rise.
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