Record metals prices are luring more and more foreign miners to mineral-rich Asia, a region long-ignored by western firms, but security and political risks remain a concern for companies seeking to reap huge returns.
From Papua New Guinea to Laos, Indonesia to Mongolia, and the Philippines to Kazakhstan, miners have cleared forests and dug deep into mountains in search of copper, gold, zinc, coal, iron ore and other minerals.
With sky-high metals prices, prompted by tight supply after years of under-investment in mines and China's voracious appetite for resources, many small miners have emerged recently in countries previously shunned by foreign investors.
"We are in Kazakhstan because it's a great opportunity as we are in elephant hunting," said Elmer Stewart, president and chief operating officer of Alhambra Resources Ltd, a Canadian firm that operates a gold mine in the central Asian country.
Alhambra, which churned out nearly 15,000 ounces of gold in 2005, has joined a growing number of junior mining companies vying for fortunes in Asia, which already hosts mining giants such as US firms Freeport-McMoran Copper and Gold and Newmont Mining Corp and Canada's Placer Dome Inc and Inco Ltd
With gold hovering around $580 an ounce - a 25-year high - after rising more than 11 percent so far this year, Alhambra is upbeat on its future. It aims to produce 25,000 ounces of gold this year.
"I am not sure that I believe some of these forecasts where you're going to see $1,000 or $2,000 (an ounce)," Alhambra Chief Executive Officer John Komarnicki told Reuters on the sidelines of mining conference.
"Anything is possible but in our conservative planning, we we're planning on $500 an ounce and that for us would provide a tremendous opportunity to secure a fairly significant return on our investment. So we are happy with that. The higher it goes, the happier we will be." But while Asia may promise good returns there are also problems facing western mining firms, especially in countries where security and legal uncertainties have become an issue.
Indonesia, which is rich in copper, gold, tin and oil, has seen violent protests, mostly from illegal miners, against Freeport and Newmont.
and in neighbouring Philippines, the government has bowed to pressure from the country's powerful Catholic Church to review its investor-friendly mining law.
To the east, in Papua New Guinea, tribal allegiance dominates and often leads to bloody feuds and personal safety of expatriates remains an issue.
But despite the problems, Philip Romualdez, President of the ASEAN Federation of Mining Associates, said the region aimed to increase export revenues from minerals to $15 billion in five years time, from the current $5 billion.
Members of the Association of South East Asian Nations include Indonesia, the Philippines, Malaysia, Thailand and Myanmar.
"In the case of Indonesia, they have a higher production value today but they are undergoing certain issues locally that have stifled foreign investment," said Romualdez.
"These are all part of the issues that we have to deal with," said Romualdez, adding the mining industry had an important role to play in creating jobs and alleviating poverty.
Four policemen and a soldier were killed this month during protests demanding the closure of a mine run by Freeport in Indonesia's remote Papua province, highlighting growing resentment against foreign firms in Southeast Asia's largest economy.
Freeport's Grasberg mine is believed to have the world's third-largest copper reserves and one of the biggest gold deposits. But there are success stories.
Australia's Oxiana Ltd swung into profits in 2005 and will double copper output from its mine in Laos to around 60,000 tonnes this year. It also looks to expand exploration in China and Thailand and capitalise on the booming metals demand.
Copper for delivery in three months on the London Metal Exchange hit a record high of $5,360 a tonne on Wednesday.
"We are right on the doorstep of our customers. We don't have to bring in from other continents, so we can deliver to our customers in two or three days," said Peter Albert, the company's executive general-manager. "And the copper we produce is very, very high quality. LME-grade type copper."
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