Century Mine Closure to Leave a Hole for New Zinc Producers...

Century Mine Closure to Leave a Hole for New Zinc Producers

Thursday January 15, 2015, 3:45pm PST
By Charlotte McLeod2+3 - Exclusive to Zinc Investing News
Back in December, Stefan Ioannou, mining analyst at Haywood Securities, advised zinc market watchers to keep an eye out for updates on MMG’s (HKEX:MMG) Century mine.
Though the company said8 back in October that it will stop producing this year, the timeline has bounced around, causing some confusion. Thursday, however, MMG Managing Director Andrew Michelmore confirmed during the release of the company’s Q4 operations report that Century will indeed close in 2015.
“As we prepare for the end of open pit zinc production at Century this year, we continue to study future options to use the operation’s infrastructure as part of the wider Queensland operations strategy,” Reuters quotes him as saying.

He also relayed some information about exactly how low the mine’s output will get in the lead up to its closure, noting that production from Century will sink by up to 31 percent in 2015. Overall, the company expects to put out 320,000 to 370,000 tonnes of zinc this year, down significantly from the 465,696 tonnes it produced in 2014.

As mentioned, MMG wants to reuse the infrastructure at Century, hopefully for further zinc mining in Queensland. Its Dugald River deposit is reportedly being assessed for future development, but it won’t be able to replace the huge amount of zinc produced by Century.

That’s too bad for MMG, but for the rest of the zinc market, it’s good news. That’s because the absence of Century will exacerbate the zinc deficit, which according to Reuters came to 309,000 tonnes for refined zinc in the first nine months of 2014 — that’s a whopping five times bigger than the deficit seen in 2013. And of course, with that deficit will come a higher zinc price and more opportunities for junior and mid-tier miners to grab a piece of the zinc pie.