Irish strike lucky in new wave of zinc fever
Published 19/06/2008 | 00:00
WITH interests ranging from diamonds in Africa to gold in Iran, John Teeling has a diverse portfolio of companies hunting riches in almost every corner of the planet.
But despite the successes enjoyed by the likes of his African Diamonds venture, it is the Irish-based Connemara Mining which has delivered what could potentially be his greatest exploration success.
The latest Irish explorer to hit it big in the zinc business, Connemara and its partner, Canadian firm Teck Cominco, is appraising what could turn into Ireland's next major zinc mine at Stonepark, Co Limerick, while it is also examining the potential of an old discovery at Lough Sheelin on the Cavan/Meath border.
The Limerick discovery, Teeling explains, was due to a mixture involving "trendology, closeology and luck".
"Connemara was established because an experienced Irish base metal geologist saw that good ground was free, he believed in it and he persuaded us to put up money to apply for the licences.
"We now have 38 licences -- almost all close to existing or former mines."
The spur to the renewed exploration drive was the huge run-up in zinc prices which started in late 2005.
"The last discovery in Ireland was 1991. That was Lisheen. Between 1991 and 2005 zinc and lead prices were too low to encourage exploration and worldwide zinc exploration virtually disappeared," Teeling explains.
Connemara and Minco were two notable exceptions to this rule, getting in early on the renewed rush for zinc. The hunt focused on Ireland because it is regarded as a zinc province with excellent geology.
That, and the old adage that states that the best place to find a mine is where there is, or was, a mine.
"The red-hot spot for exploration at the moment is the Limerick region, but we have very high hopes for ground around Lisheen and Silvermines as well as Lough Sheelin. Teeling also states that within the industry it has long been believed that more big mines remain to be found here.
"People have believed since 1970 that a zinc deposit exists in the Limerick region.
"It must be remembered that the nature of Irish geology produces big zinc discoveries, ie Tara, Lisheen are world-class. What is likely in Limerick is a plus 20 million tons of zinc deposit, very large by world standards."
While still at an early stage, the exploration work at Stonepark has already thrown up one hole with a huge 28pc grade of zinc. As Teeling puts it, good grades like this shorten the odds that the find will become a working mine.
"We are a long way from commerciality in Limerick and very long way in Lough Sheelin. The good results in phase two in Limerick shorten the odds.
A couple more good holes will see a massive effort to prove a commercial deposit. It will be at least six, and up to eight years, before there will be a producing mine."
Lough Sheelin, meanwhile, is still only a prospect with the next phase of drilling aimed at identifying the direction and size of mineralisation.
"Lough Sheelin is a couple of years behind Limerick and much less certain," he says.
Apart from the good geology, Ireland has one other thing going for it as an exploration province. "The political, legal, commercial and financial environments in Ireland are among the world's best," Teeling says, adding that title is clear as are most commercial terms.
"Certainly getting exploration ground in Ireland is simpler, easier and quicker than almost anywhere in the world and terms are good", though he cautions that the negotiation of an exploitation licence is more difficult and takes time.
The industry may be partly responsible for this, with some of our previous experiences, notably at Tynagh, doing little to endear the public to the base metal mining industry.
"Miners are woeful at interacting with the community," he says. This despite the fact that the industry has a lot to offer any community located in the vicinity of a mine.
"Mining has a huge multiplier effect. It is believed that every €1 spent in a mine results in €9 of income generated locally."
"There are many entrepreneurial opportunities for locals in a mine, transport, catering, contract mining, staffing services etc. Locals can, and should, supply these services.
"It is normal to recruit locally, so you are looking at hundreds of well-paid jobs."As well as offering locals a job, a modern mine must be harmonious with the environment and Teeling points to Sweden as a country which can offer a model. "If you need belief, take a look at Sweden, which is the fastest growing mining country in Europe, yet has the toughest environmental laws."
The last few years has seen the zinc price peak at around $4,000 a tonne, or more than four times the price at which it languished for much of the 1990s. Given the huge demand for the metal in the growing economies of China and India, there appears little danger that the price will slump much below the current $2,000 mark.
The International Zinc Association, he says, believes long term zinc growth rates will be 4pc per annum instead of the 2pc of the last 50 years.
The bottom line is that at current prices it would be viable to open a large Irish zinc mine at the kind of grades being discovered in Limerick -- provided of course, that Connemara's luck holds out.
"The next holes in Stonehill Limerick are important.
"They are step-out holes, stretching away from the discovery holes. The grade and thickness are good, we now need the volume."