LONDON, July 12 -- Xstrata PLC (XTA.LN) Friday said it is starting construction on its Bracemac-McLeod zinc mine in Canada and expects full capacity to be reached by the first quarter of 2013, with initial production set to begin in early 2012.
Xstrata said the mine will produce 80,000 metric tons of zinc and 10,000 tons of copper a year over at least four years.
The capital cost for Bracemac-McLeod is $151 million, of which Xstrata's share will be $98 million. The mine is owned through a joint venture with Donner Metals (DON.V), which has an option to earn a 35% stake by funding its share of spending.
Ore from the mine will provide feed to Xstrata's Matagami zinc concentrate plant once Xstrata's Perseverance zinc mine's deposit is exhausted, Xstrata said in a statement.
"The project is a low capital cost, high return project that will provide a continued feed of ore to Xstrata's Matagami concentrator," said Jean Desrosiers, vice-president of mining operations at Xstrata's Canadian zinc division.
Switzerland-based Xstrata is one of the biggest zinc producers in the world.