MMG CEO Andrew Michelmore is very bullish on zinc, in part resulting from the impending closure of his company’s Century mine next year with nothing of comparable size to replace it.
LONDON (MINEWEB) – At the tail end of a very interesting East meets West seminar put together by Bloomberg in London during LME Week, Andrew Michelmore, the CEO of MMG (the Australian-based subsidiary of China’s Minmetals), talked about his company and in particular about the massive Las Bambas copper property it is building in the Peruvian Andes.
But perhaps his most interesting comments came in a Q&A session at the end with his remarks on the global zinc market.
Michelmore is bullish on copper, but VERY bullish on zinc, and he is in a good position to understand the market as MMG is the operator of the massive Century zinc mine in Australia which is due to cease production next year. Century will produces some 400 000 tonnes of zinc this year, around 7% of global mined supply and is reckoned to be the world’s second largest zinc mine after Hindustan Zinc’s Rampura Agucha in Rajasthan, India.
Century is due to run out of open pittable ore by the end of the current year, but can probably continue processing material until Q3 2015. Beyond that production will cease said Michelmore in an answer to a direct question on the Century closure schedule. And according to Michelmore – and virtually all the zinc analysts – there is no new mine coming on line that can replace this ore.
There are some much smaller operations due to start-up, but the pipeline is being further slowed by the lack of availability of funding in the current financial markets.
Meanwhile zinc demand is continuing to grow. Michelmore reckons that about 80% of the western world’s automobile sector uses zinc galvanising for rust protection and, although European car production is relatively flat, US motor output is rising again.
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