Wednesday, June 18, 2008

Why are so many foreign companies investing in Arizona mines?

Why are so many foreign companies investing in U.S. and particularly Arizona mining projects?

Today we hear that Sumitomo Corp. of America has loaned Augusta Resources Corp. $40 million in exchange for the right to negotiate a minority ownership interest in the Rosemont project [right: credit, Rosemont Copper]. Augusta itself is a Canadian company, with financial support from another Canadian company, Silver Wheaton. Sumitomo's web site says the company "serves several American mining companies in exporting their commodities to Japan and other countries."

Sterlite Industries of India is bidding to take over Asarco from Grupo Mexico.

The giant Resolution Copper project is a joint venture between Australian BHP Billiton and UK-based Rio Tinto.

Sumitomo already has a 15% stake in Arizona’s huge Morenci mine, run by Freeport McMoRan. Their $40 million investment in the Rosemont mine will be used to buy equipment.

These are just a few high profile examples. What it indicates is that other nations are taking strategic actions to ensure long-term supplies of mineral resources in a world of increasing demand and competition. It also means that Arizona mineral deposits are world-class.

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