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Zombie mines are back with rising metal prices

With the increasing metal prices, many previously closed mines are starting to come back to life.

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Adriatic Metals aims to restart the Vares project in Bosnia and Herzegovina in 2022, where it last mined silver in the 1990s. “Abandoned or idle mines around the world create environmental issues that need to be resolved,” said Paul Cronin, the company’s CEO, about the project’s resumption.

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With the rally in commodity prices, miners from Europe, Australia and South Africa are also in search of new fields. Anglo American Platinum, the world’s largest platinum company by market price, said that at least 4 different clusters have made offers for its idle mines in Bokoni.

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Stating that it is less costly to use old mines because they can already use the infrastructure infrastructure, Cronin stated that new technologies also make operations cheaper.

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Australian mining companies Panoramic and Mincor have decided to restart production in their mines, which were taken into maintenance in 2016 due to low nickel prices. Boss Energy, on the other hand, plans to reopen its Honeymoon Uranium mine, which it closed in 2014 due to its weak price structure, within 12 months.

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Newly opened mines are the most fragile

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MineLife Consulting Founder Gavin Wendt said that the strong economic environment encourages miners to start operations again. Wendt said, “The reason why most of these reopened operations are closed is because they stay well above the cost curve” and emphasized that these newly opened mines will be the most sensitive operations to price movements in commodities.

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While the Bloomberg Commodity Index has increased by 21 percent since the beginning of the year, the Bloomberg Base Metal Index, which does not contain precious metals, increased by more than 20 percent. Gold is down 4.5 percent since the beginning of the year, while silver is down 1.1 percent.

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