One of Australia’s foremost mining people has warned that equities and resources markets in Australia should not be deterred or deflected by the recent slump in metals prices generally. Addressing the second day of the Paydirt 2008 Victoria Resources Conference, Oz Minerals’ Director,  Owen Hegarty, described the slump as nothing more than a “short-term blip on our radar screens. There is a snatch and grab going on out there globally for resources to supply burgeoning demand and we should be getting our engines ready for a market resurgence in the very near future.” Hegarty told delegates.

“This is being led obviously by China which has the perfect quadrella – firstly, growth on a scale never seen before. It has massive investment in infrastructure, the largest urban migration in the history of the world, and an increasing intensity of metal uses, creating a very positive demand side – so it is the perfect storm. In terms of supply, it is the perfect nightmare.”

Hegarty said there were decreasing copper discoveries, exploration was being forced into domains it had not been previously, head grades were declining, every project faced increased capital costs and delays, and continuous disruption to power and water and acid shortages.

“The acid situation worldwide is critical and is turning many SX-EW copper producers from low cost producers into high cost producers for that component alone. Acid costs have gone from virtually negligible to around $500/t.”

Hegarty welcomed however the Rudd Government’s willingness to mining sector pleas for a flow through share scheme. “The sector tried so many times with the previous Federal Government and failed but we believe we have a real chance this time, and this will be a real breakthrough for this Government.”