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Barrick Gold workers repair a dam affected by rains in the Dominican Republic earlier this year.

Miners are forging ahead with aggressive spending plans despite sinking stock values and retreating commodity prices, in a bet that metals demand will remain solid even as the global economy softens.

Mining giants such as Alcoa Inc., Rio Tinto PLC and Xstrata PLC advanced major new projects this week, adding to the billions of dollars earmarked by miners around the world for expansion through acquisitions, new mine construction and increased exploration.

The spending spree, made possible by years of strong commodity prices that fattened profits, is largely focused on expanding production to meet the needs of commodity-hungry countries such as China, India and Brazil.

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In fact, miners are moving forward so fast they are setting records in both exploration and acquisitions.

Exploration budgets for metals are expected to hit a record of more than $17-billion (U.S.) this year, an increase of about 50 per cent from last year, Metals Economics Group estimates in a report released Thursday.

And nearly 1,400 mining deals worth $71-billion were announced in the first six months of this year, making it the busiest half year in the history of the mining sector, according to a recent report from PricewaterhouseCoopers.

Jittery global equity markets have put some future financing and M&A deals on hold as stock prices tumble amid indicators pointing to a slowing global economy. Metal prices have fallen in recent weeks, but remain at traditionally high levels.

Still, miners haven't reined in spending, even as the cost of operating and building mines climbs. It's a change of pace for miners from a couple years ago, when they were cautious to boost budgets coming out of the 2008-09 global recession.

Xstrata said this week it plans to invest $1.47-billion in two copper mines in Peru, with the goal of increasing production in the country by 60 per cent in 2012. On Thursday, Rio Tinto announced plans to invest $833-million in major power and fuel supply projects in Western Australia to help substantially increase iron ore production capacity.

Aluminum giant Alcoa also said Thursday it will spend $300-million to expand a rolled products plant in Iowa to meet rising demand from the automotive market.

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Teck Resources Ltd., Canada's largest diversified miner, is expected to announce soon it will restart production at its Quintette coal mine in northern British Columbia in 2013. Other major miners such as BHP Billiton Ltd. and Vale SA are also moving ahead with multi-billion-dollar capital spending plans.

The high price of gold is also driving miners to boost production as they scramble for what's left of the world's diminishing resources. Toronto-based Barrick Gold Corp., the world's largest miner of the precious metal, said this week it completed a $550-million upgrade to extend gold mines in Peru.

Analysts say companies are staying on their spending course because, despite a pullback, commodity prices have remained at high levels and demand is still strong while supply continues to be constrained. "When we think of principle drivers such as iron ore, copper, metallurgical and thermal coal, those prices remain elevated," BMO Nesbitt Burns analyst Tony Robson said in an interview. "It indicates the emerging nations continue to consume those goods."

Mr. Robinson also noted miners invest "for the long haul. They are making investment decisions today that may take years to pan out."

China remains the focus for miners as they brush off concerns the debt crisis in Europe and a slowdown in the United States will dent demand for their products.

China consumes 40 per cent of the world's copper and is expected to help keep demand steady, according to JX Nippon Mining and Metals Corp., the parent of Japan's top copper smelter.

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"Europe's debt woes have prompted investors there to shift funds to less-risky assets, pressuring copper prices on the London Metal Exchange, but demand in China remains decent," Masanori Okada, president of JX Nippon Mining, told Reuters.

"At least real demand is solid and there will be no collapse in the Chinese market next year."

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