Mining: Hopes of a return to an old island industry
By Kerin Hope

FT
August 1 2005 17:30

Ron Cunneen cracks open a boulder on a slope below Mount Troodos with
a geologist’s hammer and points to a blue-green copper stain on the
exposed surface. “This hillside is one of our most interesting target
areas for exploration,” he says.

Mr Cunneen, exploration director at East Mediterranean Resources,
a Cyprus based mining company, says that after a 30-year gap in
prospecting, there are good possibilities of discovering commercially
viable copper deposits on the island through the use of up to date
geophysical techniques.

Companies that worked in Cyprus in the 1950s and 1960s used modern
machinery to extract additional ores from deposits that had been
mined in antiquity.

“The surface has been mined to oblivion, but we’re doing blind geology
– looking for ore bodies at shallow depths,” Mr Cunneen says.

Cyprus used to be renowned for its copper. Its name is derived from
the ancient Greek word for the mineral. Ox hide shaped copper ingots
smelted from locally mined ores were traded across the Mediterranean
more than 3,000 years ago. Copper mining was the island’s biggest
foreign exchange earner until the arrival of sun and sea tourism.

But the Turkish military intervention in 1974 halted mining activity.
The island’s biggest producer, Cyprus Mines Corporation of the US –
the forerunner of Cyprus Amax – pulled out after its copper mining
operation and treatment plant were separated by the ceasefire
line. High levels of perceived political risk kept Cyprus off the
international prospecting map.

In spite of a surge in copper prices, operations have been suspended at
Hellenic Copper Mines, the last surviving Cypriot producer, because
the company has been unable to service its debts.

Aristidis Anagnostaras-Adams, chief executive of EMED, says it is
time for a new start. “Sovereign risk is less now that Cyprus is a
member of the European Union and we see our mineral rights there as
a cornerstone asset.”

EMED earlier this year raised £2.25m through a flotation on London’s
AIM market for small companies. Mr Adams, a Greek-Australian who
revived an early 20th century coal mine and gold extraction operation
at Gympie in Australia, says the company plans to spend up to £1m
on a two-year exploration and drilling programme.

Remaining funds would support gold exploration projects in Greece,
Bulgaria and Slovakia, where EMR has applied for prospecting licences.

“We’re following specific mineral belts across the region that offer
opportunities in a number of countries, from Armenia to Slovakia”
Mr Adams says.

The Troodos mountain range in south Cyprus is part of a 5 km wide belt
of copper-bearing rock, that extends for 80 km across the island. The
richest deposit known to date produced 15m tonnes of ore with a copper
content of 4 per cent.

“We’re looking to find several deposits with a similarly rich copper
content,” says Nicos Adamides, EMED’s senior geologist.

EMED has acquired prospecting permits covering 370 sq km, including
about two-thirds of the “pillow lava” rock formations that contain
all the known copper deposits on Cyprus.

It also has acquired 95 per cent of East Mediterranean Minerals, a
joint venture between Oxiana of Australia and Hellenic Mining Company,
the parent of Hellenic Copper. Hellenic has retained the remaining
5 per cent.

The acquisition included an extensive database built by Oxiana,
which has been upgraded to allow faster analysis and interpretation.

EMED plans to make four or five test drillings later this year in
target areas that geophysical studies have identified as having rock
structures similar to known copper deposits.

The Troodos area, which traditionally produces fruit and vegetables,
has seen a sharp decline in population as young people leave for
jobs in Nicosia and tourist resorts on the coast. While abandoned
opencast mines are visible in the mountains, copper mining activity
was located away from villages.

EMED, which has its field office in the mountain village of Agia
Marina, has started to address potential environmental issues by
explaining in detail its prospecting programme to local officials in
the Troodos area.

Mr Cunneen says: “People here haven’t forgotten the mining boom in
the mid-20th century and the prosperity it brought. We believe there’s
local support for mining.”

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