Oz well positioned to expand in Asia VICHAYA PITSUWAN - BANGKOK...

Oz well positioned to expand in Asia

VICHAYA PITSUWAN - BANGKOK POST

Australia-based Oz Minerals Ltd, the world's second-largest zinc producer, vows to continue its exploration projects in Asia despite the plunge in commodity prices and demand stemming from the global crisis.

Peter Albert, executive general manager for Asia, said the extent of the drop in commodity prices surprised the mining industry.

"This is the downturn of the cycle but it will reverse. We don't know when that will happen, but the main driver will be China infrastructure building projects. In the medium term I am positive that the industry will improve," Mr Albert said in an interview in Bangkok.

While reluctant to comment on whether commodity prices had bottomed out, Mr Albert insists that Oz Minerals will continue to invest in potential projects in Asia. "We are positioned to take advantage of the situation and we can do this because we have good balance sheet."

But like other miners, in the current economic slowdown, he said: "We are reviewing our programme and repositioning ourselves, so some projects with less potential will be on hold while some [with high potential] we will pursue aggressively."

In Asia, the company is well established in Laos, where it runs gold and copper mines, in which it has invested more than US$700 million since 1993.

In Indonesia, a number of activities are taking place and it will soon start gold and silver mining in North Sumatra.

In Cambodia, gold and copper exploration projects have been promising while in Vietnam, Oz Minerals is looking for local partner to support its access to explore deposits there.

Oz Minerals entered Thailand three years ago through Thai Goldfields Joint Venture, a 50:50 venture with a Thai partner, to explore gold mining opportunities. It has found gold deposit potential in two sites in Phichit and Phetchabun provinces and is now evaluating their economic viability.

Its second venture is under Oz Minerals, with 100% ownership through a local company, Navakun Mining Co, which aims to explore iron ore deposits in 24 tracts totalling 240,000 rai in Rayong, Chanthaburi and Chachoengsao.

Of the 24 plots, nine covering 90,000 rai have received exploration licences this year and surface exploration has been completed.

"We expect to start drilling within this month," said Pasavorn Boonyathada, Oz Minerals' regional manager.The remaining plots are in different stages of exploration licence applications.

"Our venture here is still in a very early stage so we have only injected about 100 million baht to finance our operation so far," said Mr Albert. "But with the drilling to be done, we expect to inject another A$100 million next year to finance this exploration project."

Exploration licences last only five years but Mr Albert believes the venture will know within four years whether full-scale mining investment will be viable.

The company is interested in iron ore exploration possibilities in other areas of Asia as well.

"The potential in this region is very good we are looking for opportunity in both bulk and precious commodities anywhere in Asia," Mr Albert said.

Rising concern about environmental impact is not a worry, he added.

"As a large company we have uncompromising principles. It is written stone for us to ensure environmental balance together with community welfare. ... We make sure that everyone involved gets a win-win outcome."