Posted: 28 Feb 2012 04:18 AM PST
AFTER the collapse of the tin market in the 1980s, the local mining operation has been carried out in a rather ambiguous manner.
But, mining is now making a big comeback. Over the past three to four years, there have been a significant increase in issuance and renewals of mining leases as well as mining concessions by the state governments like Terengganu for iron ore and Perak for tin mining.
Furthermore, what makes the revival in the current local mining scene exciting is that lately there have been strong foreign investments, either direct or via joint ventures with domestic players.
Interestingly, some of the domestic players which are investing in the mining operations were greenhorns with basically zero experience in mining.
While one will barely bat an eye if the world's third-largest tin producer, Malaysia Smelting Corp Bhd, or steel-based Perwaja Holdings Bhd were given the rights to mining concessions, some will question the involvement of pipe maker Hiap Teck Ventures Bhd or even condom maker Takaso Resources Bhd in iron ore mining.
But then, it makes perfect sense when Hiap Teck's collaboration with one of China's top steel group, China Shougang, and Chinaco Investment Pte Ltd helps to create Eastern Steel Sdn Bhd, a company which will manage an RM1.8bil integrated steel complex in Kemaman.
Eastern Steel has been given a 60ha iron ore mining concession in Bukit Besi by Terengganu. This venture marks the biggest foreign direct investment in the state.
As for Takaso, its highly speculated collaboration with Terengganu state-owned timber company Golden Pharos Bhd to acquire iron ore mining related projects would also have its merits in the foreseeable future.
Another steel group, Perwaja Steel, is currently waiting for the iron ore mining concessionaire from Terengganu.
To date, there are about 50 iron ore mines scattered throughout Pahang, Johor, Perak and Terengganu.
Perak is also banking on the significant increase in tin price and the global tight supply situation by actively issuing and renewing tin mining leases.
In 2008, the state had awarded HWG Tin Mining Sdn Bhd, a unit of Ho Wah Genting Bhd, a 10-year lease to mine tin and other minerals on 500 acres in Pengkalan Hulu with the potential for a further 500 acres as the work on the initial area progressed.
Perak has also given the green light to Vale, the world's second-largest mining company, to build an iron ore distribution centre in Teluk Rubiah, near Lumut, with the project site expected to be fully operational by June next year.
To quote Malaysian Chamber of Mines president Datuk Seri Ajib Anuar who has about 40 years experience in the mining sector, "mining in the future would need to be on a large scale and there will be no more small miners involved. While mining may take a long gestation period but once we recover the deposits, the reward will also be great."
Deputy news editor Hanim Adnan is positive on mining, but wants players to take great care of the environmental issues that usually crop up with rampant mining activities.
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