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OZ Minerals Says Zinc Prices May Rebound From 2010

OZ Minerals Ltd., the world's second- largest zinc mining company formed by Oxiana Ltd.'s takeover of Zinifex Ltd., expects prices, which have halved since the start of last year, to rebound from 2010 because of supply constraints.

``The zinc prices have come off a lot, there is a very bearish view in the market, an anticipated surplus this year and next year,'' Andrew Michelmore, chief executive officer designate of Melbourne-based OZ Minerals, said in an interview. ``However, as we look forward there is a shortage of zinc production in 2010, 2011 and we expect a considerable turnaround in prices.''

Zinc, used in galvanized steel, will rise from 2010 as supply declines, Goldman Sachs Group Inc. said last week. CBH Resources Ltd., a rival Australian zinc producer, said yesterday the workforce at its Endeavor mine will be slashed 37 percent to reduce costs after declines in metals prices.

``Either the zinc price has got to go up or operations will close,'' Alex Passmore, head of metals and mining research at Patersons Securities Ltd., said today from Perth. ``With an 18- month view I think the zinc market will turn around mainly driven by supply not coming online as fast as most people think.''

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