LONDON, Nov 15 (Reuters) – The Dugald River zinc mine in the Australian state of Queensland made its maiden shipment of concentrates earlier this month. Once ramped up to full speed, the mine will produce around 170,000 tonnes per year of contained metal.
It is the most tangible sign yet of the coming wave of new zinc supply, timed to capitalise on decade-high prices and a structural shortfall of raw materials. All over the world, it seems, geologists are revisiting old mine plans in a collective new zinc rush.
They’re even looking to revive the giant Century mine in Australia. Once operated by Dugald River’s owner MMG, Century’s closure in 2015 was a symbolic milestone on the road to global market deficit.
Now New Century Resources is studying whether there’s still value in the old mine’s tailings. And then there is Glencore, which has so far held off reactivating the 500,000 tonnes of annual mine capacity it shuttered at the end of 2015.
A partial restart looks increasingly likely as the zinc market narrative turns from current supply famine to future feast. This collective rethink of zinc’s fundamental story is reflected in London metal’s slide from the Nov. 1 peak of $3,326 per tonne to a current $3,100.
Yet in the short term at least, it’s not Queensland that will determine zinc’s fortunes but rather Quebec in Canada.
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