Ingots of 99.99% pure silver. Picture: REUTERS/ILYA NAYMUSHIN
Ingots of 99.99% pure silver. Picture: REUTERS/ILYA NAYMUSHIN

A silver mine in Bosnia and Herzegovina that lay derelict during the years of civil strife that gripped the region in the 1990s may soon be revived to benefit from an optimistic price outlook.

Adriatic Metals’ Vares project could resume production by the end of 2022 after a hiatus of more than three decades, according to CEO Paul Cronin. It is part of a nascent trend of restarting “zombie” mines — operations that have been closed for reasons varying from weak prices to owner bankruptcy or political unrest.

“Some of these old mining assets around the world that have been discarded and dumped are an eyesore — they’re a problem. They create potential environmental issues that need to be resolved,” Cronin, a former investment banker, said in an interview. “If we can convert the ‘zombie’ into something that adds value, that resolves some of those issues and shareholders can get a return from them, that’s great.”

Mining companies from Europe to Australia and SA, are motivated by the rally in commodity prices that is being driven by the global economic recovery and infrastructure spending tied to the transition to clean energy. Anglo American Platinum has been approached by at least four groups for its idled Bokoni mine, people with knowledge of the matter said in June.

The advantage of recycling old mines, even ones that haven’t been in production for decades, is that it can save costs by using the existing infrastructure, Cronin said. Vares already had rail links and roads, and Adriatic was using some of the former site’s facilities including power lines. New technology can also help to make shuttered operations more economically viable. The company is also developing a zinc project in neighbouring Serbia.

Australia is also getting in on the act: Panoramic Resources and Mincor Resources are restarting nickel operations, having put them on care and maintenance in 2016 in response to weak global prices. The Honeymoon uranium mine, which was shuttered in 2014 due to weak prices, could be restarted in 12 months, developer Boss Energy said in a feasibility study that noted the price outlook.

In Mincor’s case, the resumption of its Kambalda mine is backed by an offtake agreement with BHP’s nearby Nickel West operation, which is itself enjoying a renaissance amid a surge in demand for the battery metal. Prices have gained more than 30% over the past year.

Strong prices have led mining companies to look at the economics of reopening mothballed operations, said Gavin Wendt, founding director of consultancy MineLife. So far, it had mainly been smaller mines that had restarted, which were unlikely to have much impact on the market, he added.

“A lot of these operations sit at the high end of the cost curve, that’s why they’re not in production now,” Wendt said. “So that tells us they are quite marginal and they are the most vulnerable to movements in commodity prices.”

Still, with the infrastructure already in place, restarting a mine was a relatively low-risk strategy compared with developing new resources, he added.

Silver has risen nearly 40% over the past 12 months and with the precious metal also in demand for use in solar panels and electric vehicle charging stations due to its conductive properties, Cronin said he is confident that the price outlook remains robust for his project.

Bloomberg News. More stories like this are available on


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