Overseas Zinc Concentrate Production Declined in Q1 2024, What About Q2? [SMM Analysis]

Most mining companies have released their Q1 financial reports. Unexpected factors such as heavy rainfalls, floods, and safety incidents were frequent in Q1, significantly affecting production, which saw a sharp decline on the quarter but remained flat YoY.

SMM has compiled production statistics for 19 major overseas mining companies. According to the disclosed data, these 19 companies produced a total of 1.2182 million mt of zinc concentrate in Q1 2024, down 97,900 mt (-7.44%) from 1.3161 million mt in Q4 2023, and flat compared to 1.2185 million mt in Q1 2023. The figure below shows the quarterly production data for each mining company as compiled by SMM.

By mining company:

• Boliden: Q1 2024 zinc production was 39,727 mt, up 2.93% QoQ, down 35.13% YoY. The report disclosed that the Boliden Area in Sweden produced 11,882 mt of zinc concentrate in Q1, down 13% QoQ. The Tara mine entered maintenance on July 14, 2023, with no production in Q1. However, Boliden announced the resumption of production at Tara on May 3, with plans to gradually increase production starting in Q4, aiming for full capacity by January 2025. The Garpenberg mine in Sweden produced 27,846 mt of zinc concentrate in Q1, up 11.6% QoQ and 14.18% YoY. The decline in Q1 was mainly due to the Tara mine.

• Buenaventura: Q1 2024 zinc production was 8,814 mt, down 40.17% QoQ, up 467.91% YoY. The report disclosed that the El Brocal mine in Peru produced 1,985 mt of zinc concentrate in Q1, down 81.08% QoQ, mainly due to the processing of 593,000 mt of previously considered stockpiled polymetallic ore in Q4 2023, while 293,000 mt of polymetallic ore was processed in Q1 2024, marking the final stockpile of the open-pit mine. The Uchucchacua mine in Peru resumed operations in Q4 2023, producing 5,494 mt of zinc in Q1 2024, up 98.84% QoQ, with production in line with expectations, increasing from 800 mt/day in Q4 2023 to an average of 1,000 mt/day in Q1 2024, and expected to reach 1,500 mt/day by year-end.

• Lundin: The Zinkgruvan mine in Sweden produced 19,201 mt of zinc concentrate in Q1, down 2.45% QoQ, mainly due to lower zinc grades. The Neves-Corvo mine in Portugal produced 26,487 mt of zinc concentrate in Q1, down 14.65% QoQ, due to lower zinc grades and recovery rates, and a voluntary three-day shutdown following an operational incident in February.

• MMG: Q1 2024 operations were affected by extreme weather and floods, with zinc concentrate production of 59,247 mt, down 7.09% QoQ, up 93.3% YoY, mainly due to the impact of the Dugald River shutdown in Q1 2023. The Dugald River mine produced 44,760 mt of zinc concentrate in Q1, while the Rosebery mine produced 14,487 mt.

• Newmont: Q1 2024 zinc concentrate production was 57,600 mt, up 154% QoQ, up 24.51% YoY.

• Nexa: Q1 2024 zinc concentrate production totaled 87,400 mt, up 16.84% YoY, mainly due to increased ore quantity and zinc grades. The 2024 production guidance is 323,000-381,000 mt.

• Pan American Silver Corp: Q1 2024 zinc concentrate production was 9,800 mt, down 7.55% YoY, mainly due to lower zinc grades at Huaron and San Vicente, and reduced output at La Colorada, offsetting increased production at Minera Florida.

• South32: Q1 2024 zinc concentrate production was 14,300 mt, down 9% QoQ, up 13% YoY, mainly due to the impact of Tropical Cyclone Kirrily, with higher-grade mining areas expected in Q2.

• TECK: Q1 2024 zinc concentrate production was 159,900 mt, down 12.05% QoQ, up 10.28% YoY. The 2024 production guidance is 565,000-630,000 mt. By mine, the Red Dog mine produced 145,300 mt of zinc concentrate in Q1, down 6.44% QoQ, up 15.13% YoY, with a 2024 production guidance of 520,000-570,000 mt. The Antamina mine, attributable to TECK, produced 14,600 mt of zinc concentrate in Q1, down 45.07% QoQ, with a 2024 production guidance of 45,000-60,000 mt.

• Vedanta: The Zinc India mine in India produced 299,000 mt of zinc concentrate in Q1, up 10% QoQ, mainly due to higher zinc grades and ore production. Zinc International's zinc concentrate production decreased 20% QoQ, with the BMM mine producing 12,000 mt and the Gamsberg mine producing 21,000 mt in Q1.

• Glencore: Q1 2024 self-produced zinc production was 205,600 mt, with stable performance. The increase in zinc production at the Zhairem project offset declines at other mines. The McArthur River mine's production was affected by heavy rainfalls in Q1. Glencore's 2024 production guidance is 900,000-950,000 mt.

• Antamina: Q1 2024 zinc concentrate production was 64,700 mt, down 45% QoQ, mainly due to changes in mining sequence and lower zinc grades.

The global zinc ore supply remains tight this year, with TCs falling to historical lows. The figure below summarizes the events affecting overseas mines in 2024 so far. In Q1, mines in Australia, Peru, Portugal, and other regions experienced production disruptions. The Tara mine is expected to resume, together with the recovery of some overseas mines from Q1 disruptions, potentially increasing Q2 production QoQ. For the full year, although some overseas mines like Antamina plan to reduce production, new mines such as Kipush, Ozernoye, and Vares, as well as further capacity releases from some projects, may slightly increase overseas zinc concentrate production this year.