Mining industry can become a significant contributor to the Cyprus economy
By Peter van der Borgh*
A crisis can often teach us valuable lessons or drive us to reassess our priorities and explore better strategies. The recent coronavirus outbreak (COVID-19) has undoubtedly disrupted daily life in many ways, while governments around the world have taken economic support measures in an effort to mitigate the aftermath. Although the extent of the damage will depend on how quickly the virus is contained, such a crisis serves as a reminder of the importance of diversifying financial portfolios, not only of individuals, but also of countries’ economies, in order to minimise their risks.
Cyprus has traditionally based its economy on services, and especially the tourism sector, which have helped the country through challenging times; following the events of 1974 and more recently following the 2013 financial crisis. Of course, industries such as tourism can be major pillars of economic growth, but at the same time they are vulnerable to various external factors such as economic downturns, political instability, natural disasters and most recently, a pandemic.
However, as in the cases of individual investors, the risk may be reduced by adding more assets that are not highly correlated with each other, to one’s portfolio. In this sense, the more diversified a state’s economy is, the safer it can be against unexpected risks that might affect certain industries.
While Cyprus’ current exports are mainly focused around pharmaceutical and agriculture products such as potatoes, citrus, halloumi cheese as well as cement, the country also has a long tradition of producing and exporting copper, dating back nearly 4,000 years. Although exploration and mining were limited following the events of 1974, significant technological advances in exploration, mining, environmental, and social management have occurred since. What is more, there are indications of substantial untapped deposits across the island and given that mining is a long-term employment and investment, its sustainable development can have a positive impact on the country’s economy, such as creating new employment opportunities, tax revenue and transferable skills and infrastructure.
In recent years especially, demand for copper has significantly increased because of the growing renewable energy sector and the efforts for decarbonisation. At the same time, future demand is expected to grow even further due to the development of electric transportation, the expansion of telecommunication networks and electricity infrastructure. Moreover, the current health crisis has shed light to particular properties of copper since copper and its alloys are natural antimicrobial materials.
When this crisis eventually comes to an end, new opportunities can emerge. Today, Cyprus has a comprehensive mining legislation framework, excellent infrastructure and local expertise to support exploration processes and mining developments. Venus Minerals is a leading exploration company based in Cyprus that is currently exploring for deposits of copper and gold on the island. We are confident that carefully selected projects and the utilisation of new technologies that have been developed over the years, can lead to the exploitation of reserves of old mines and the discovery of new ones, with minimal impact on the environment, thus, making the mining industry a significant contributor to the Cyprus’ economy.
*Managing Director, Venus Minerals Ltd