Algeria looks to mining growth and best practice

With a major new mine in development and a mining code that aims to promote more development in the sector, a high-ranking delegation from Algeria’s Ministry of Mines and Energy is currently visiting Australia to inspect mining operations in New South Wales, South Australia and Western Australia and to meet with industry leaders.

The visitors include the Presidents of Algeria’s two major national mining regulators, the National Agency for Mining Patrimony (ANPM) and the National Agency of Geology and Mining Control (ANGCM), as well as the head of the Algerian department of mines, (DGM). Terramin Australia – which is currently developing Algeria’s largest zinc mine at Oued Amizour on the north coast – invited the delegation so they could observe the dynamic conditions for promoting exploration and development investment in Australia.

While in Australia, they will tour some of Australia’s most advanced mines, including Rio’s North Parkes copper-gold mine in NSW, and the most modern base metal mine in Australia -Terramin’s  soon to open Angas zinc mine – located just 45 minutes from Adelaide. The visitors will see how the Angas mine is located near wineries and the Murray River near Adelaide, and so had to incorporate the best environmental technology while containing the operations to a very small area. In Western Australia, they will visit Oxiana’s Golden Grove base metals mining operation. These experiences provide examples of best practice that they can draw on in assessing new mines within Algeria.

Terramin’s Tala Hamza project, a joint venture with two Algerian government mining companies, is likely to be the first application of modern underground mining in Algeria. Production is planned to start around 2010-11, and the mine is likely to rank in the top four zinc producers in the world by that time, since many large zinc mines will be declining or closing from 2009.

Terramin’s Executive Chairman, Dr Kevin Moriarty said the visitors were on a fact-finding mission to learn more about the administration, regulation and promotion of mining in Australia, as well as critical public issues such as environmental monitoring, employee health and safety, and community relations. All of these issues have been climbing the government agenda in Algeria since laws governing minerals exploration were relaxed in 2000, and the State gave up its right to 51% of all discoveries made in the country.

“Algeria is opening for foreign mining and exploration ventures, usually in partnership with local firms or the government,” Moriarty said. “The sector has suffered from under investment and lack of access to modern techniques, but the country is highly prospective, particularly for base metals, uranium, iron and gold. With assistance from global firms like KPMG and Ernst and Young, the Algerian government has created new corporations and mining laws that rank with any in countries like Australia. However, the implementation of these new legal frameworks is slow owing to a large bureaucracy. The government is working to clear the bottlenecks, but it will take time. Meanwhile, there are opportunities for companies like Terramin that have the staff and culture able to work within these constraints.”

Moriarty said the top Algerian officials were also interested in how to regulate mining in a modern context, so as to incorporate sustainability and environmental protection. The visitors will receive comprehensive briefings from SA and WA mines departments, and the Department of Foreign Affairs and Trade. The Australian officials will describe tax and subsidy schemes used in Australia to facilitate exploration and mining.

Primary Industry and Resources, South Australia is hosting the visitors during the 2008 Paydirt Resources Energy and Investment Conference in Adelaide this week, providing further opportunity to meet industry leaders.

Adelaide-based Terramin has been one of the first major international miners to gain a firm foothold in Algeria, through its 65% shareholding in the local holding company that controls the world-class Tala Hamza zinc deposit at Oued Amizour. With an inferred resource of 55 Mt of high-grade ore in close proximity to European zinc smelters, the deposit has the potential to become one of the top four zinc mines in the world – at a time when production is declining globally.