xtratas doubt.3 percent of world zinc supply, page-13

re:zinc price factoring out mcarther.negative co r This doesnt sound all that good for the McArther mine.

Management says they have done all they can to give it the best chance of approval.Not exactly a positive statement and when you look at the fact they have to literally move the river to make the open cut work then one wonders just how its going to be environmentally viable according to the authority.

Funnier things have happened but the zinc price seems to be factoring in the closure of McArthur.

Trouble is look what its doing to zinc drawdown.It will be interetsing to see if fundamental buyers come back in and drawdown increases again if the mine does close.They will have no choice if this mine closes as this must effect the zinc price if 3% of zinc productin is taken out of the supply equation when concentrate supplies are already tight.

Then again it could all be a beat up by the funds to make cash on the mine closure speculation.

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Xstrata in new bid on zinc mine

July 5, 2006

XSTRATA has lodged another plan to convert its McArthur River underground zinc mine into an open-cut operation, after the Northern Territories Environment Minister rejected its first environmental report.

The Anglo-Swiss miner said the new environmental protection concessions it had made, along with higher fuel and equipment costs, would increase the cost of the McArthur River project to $82 million from an earlier $66 million estimate.

Xstrata ceased underground mining at McArthur River last year because it was no longer economic. It said the mine had never made a profit in 10 years.

The company has been mining a trial open pit while it awaits approval for the full expansion. If the expansion does not proceed, the mine will close and 270 jobs will be lost.

"We'd have to look at what the options were if this (latest proposal) got rejected, but we've said all along the open pit is the only way to secure the future of the mine," McArthur River Mining general manager Brian Hearne said.

Xstrata's expansion plans have been particularly controversial because the company plans to divert the McArthur River to get access to zinc ore. Many environmentalists oppose any open cut plan that calls for diverting the river.

"Although the company says it has addressed the major environmental concerns raised in the earlier assessment, the changes it is proposing do not in fact change the mine's fundamental flaws," said Peter Robertson, a co-ordinator for the Environment Centre of the Northern Territory.

Xstrata's latest submission to the NT Environmental Protection Agency took into account recommendations from the Government's independent adviser, Professor Wayne Erskine.

"The only option for us is we have to divert the river or close up and go away," Mr Hearne said.

"What we've done is gone to a new level of design, especially with the river and creek diversion."

NT Environment Minister Marion Scrymgour opposed the original plan, but the NT business community supported it.

Mr Hearne said Xstrata was unlikely to gain approval for the expansion without Ms Scrymgour's support.

Ms Scrymgour's spokeswoman said the minister would examine the revised proposal after a 28-day EPA review was completed.