Zinc has rallied of late, being the best performing commodity on the London Metal Exchange for the week March 13-17. Up 12% year to date, the corrosion-resistant metal is being buoyed by record refined output in China and tight supply after a number of mine closures.
News out of Iran this week, however, could stem price gains, especially if more zinc mines come on stream around the same time as plans to develop the massive Mehdiabad zinc mine, come to fruition.
Reuters reported that Iranian Mines and Mining Industries Development and Renovation Organisation (IMIDRO) signed a $1-billion deal with private investors over the weekend to build the mine, which is expected to become operational in four years and produce an annual 800,000 tonnes of zinc concentrate.
The investors comprise a private consortium of six companies, led by Iran’s Mobin Mining and Construction Company, which would run the mine for 25 years.
IMIDRO estimates the lead-zinc-silver mine has 154 million tonnes of proven reserves, which could rise to 700 million tonnes after exploration. Reuters notes the 800,000 tonnes of expected annual zinc concentrate compares to 13.2 million tonnes of zinc in concentrate produced throughout the world last year.
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