Global Mineral Producers Struggle with Funding Crunch

As global mineral producers want a more aggressive stance in their search for new sources of precious metals including gold, platinum, and palladium; and other industrial metals, but they might be caught within a funding crunch that may hamper their plans this year.

Miners of gold, along with other metals platinum, palladium, diamonds, uranium, silver, rare earths, potash, phosphate, and most industrial metals will go aggressive in their exploration projects this year, with project outlay seen to increase by 5 to 15 per cent this year, a study by Metals Economics Group said over the weekend.

However, compared with 2011 and 2010, exploration budgets of the world's various metal miners was lesser than 50 per cent and 44 per cent, respectively, still all due to the roller coaster ride of the equity markets, Bloomberg News reported, quoting data from the Halifax, Nova Scotia-based Metals Economics Group.

Smaller miners may continue to experience trouble "raising the funds needed to sustain or increase exploration spending in 2012," it said.

Last year, mining firms around the world allotted a huge $18.2 billion budget total, Metals Economics Group said, of which the biggest percentage increase spending was made in Africa at 15 percent of the world total.

Burkina Faso alone, a landlocked country in West Africa, jumped to third place in 2011 from being in the 12th place in 2009 in project spending in Africa because of more interest in gold, the report noted.

According to the www.theafricareport.com, Burkina Faso moved to become the fourth highest gold producer on the African continent, behind South Africa, Ghana and Mali, in three years' time. The country's overall gold production had been 12.2 metric tonnes in 2009, 24 metric tonnes in 2010 and 32.5 metric tonnes in 2011. Expected production of the precious safe haven yellow metal gold for 2012 has been projected to hit 40 metric tonnes to 42 metric tonnes.

Some 3,500 mining companies participated in the study of Metals Economics Group. Firms engaged in iron ore, coal, aluminum and oil and gas were excluded.

Spending on iron ore projects was probably more than $2.5 billion total in 2011, it said.