[SMM Analysis] the zinc mine is in production in the century. is the zinc supply shortage bureau facing an inflection point?

SMM, Aug. 3: new Century Resources said recently that after making considerable progress in preparing for the resumption of production at the Century Zinc Mine in July, the restart work is ready and is expected to go into production for the first time in August. According to the feasibility study of the restart of Century Zinc Mine by New Century Resources Company, the mine is expected to produce 507000 tons of zinc concentrate per year after it is officially put into production, accounting for 52 per cent of the company's total mining output. The initial life expectancy of the mine is 6.3 years.

The resumption of mining at the beginning of last month, which was completed at about 95 per cent, is now largely complete. The mine, 250 kilometers from Mount Issa, is expected to rank among the top 10 zinc mines in the world once full capacity is reached.

SMM believes that if the normal output of the mine in the next century, it will increase the supply of zinc concentrate, resulting in further relief of the shortage of mine supply, processing fees may be further increased. However, considering the recovery rate of the mine and other factors, it is necessary to pay attention to whether the later output can reach the expected value of the company. in the short term, the expected increase is not as good as expected.

Zinc Import TC Price trend Diagram

Zinc imported zinc concentrate TC continued to rise in the first half of 2018 as the global zinc concentrate was in a relatively loose pattern. According to SMM, despite the loose pattern, 2018 overseas zinc mine growth as a whole or less than expected.

Mines with plans for new production in the first half of 2018 include the Dulal River, a five-mine with a designed annual capacity of about 220000 metal tons. It is understood that this in December 2017 out of the first batch of mines, and in January 2018 has been shipped to China, so far normal production, is expected to be normal at a later stage.

The second mine, Glencore's Lady Loretta, in Queensland, is expected to resume production in the first half of this year, with a total of 100000 metal tons for the whole year. But according to Glencore's quarterly results for the first quarter, the mine has so far not resumed production, and zinc production has fallen by about 40,000 tons this year compared with the first quarter of last year.

The third is Vedanta's Gamsberg, zinc metal, which has an annual capacity of 250000 tons. The first batch of ore is expected to come out in the first quarter of 2018 and will be officially produced around the end of this year. However, according to the latest information, the mine is still under construction. And because of the general election in South Africa, the progress of the project has been delayed, and if it is put into production as scheduled by the end of this year, the increase in the mine this year should be around 30, 000 to 40, 000 tons of metal. And according to the latest news, Vedanta is considering building a new smelter in South Africa to deal with Gamsberg's mines. At present, according to the new situation of overseas mines in the first half of the year, there has been an increase, but the overall situation is not as expected.

In the second half of the year, there are two mines to pay attention to, one is Vedanta in Sindesar Khurd, India, which can be completed in the fourth quarter of this year, 18 years is no volume, to be produced in the second quarter of 19 or so; The other is Minmetals' century mine, which is expected to go into production for the first time in August, which is expected to start processing tailings by the middle of this year, with an estimated production of about 100000 metal tons. But the mine has signed agreements with Nova's Nyrstar smelter and several other smelters, and the mines are for its smelting and will not be shipped to China.

In fact, looking at overseas mines for the whole year of this year, the annual increase is expected to be around 300,000. The main ones that can be identified as entering China are the mines of the Durar River, while the rest of Glencore, which is unknown, is the main part, but the whole volume is small. So the amount of zinc ore overseas that can be shipped to China in 2018 may need to be further observed.

A brief introduction to the History of Zinc Ore in the 21st Century:

The mine went into production in 1999 and was closed by its former owner, MMG, in 2016. In June 2018 alone, New Century hired up to 290 employees and contractors to renovate and debug mines for the Century New Mining Restoration Project. The company bought Century Zinc directly in 2017, when it increased its stake in the mine from 70 per cent to 100 per cent. Subsequently, New Century Resources offered to buy the remaining 30 per cent of Century Bull, a privately owned company focused on mining recovery.

The main construction work of Century New Mine in June this year includes the completion of high-voltage power transmission, civil and earthworks, excavation of tailings pits and mud pipelines, hydraulic testing, and the signing of gas turbine supply agreements with power plants. Early resumption of diesel power and other work in order to carry out mine dredging and commissioning.

The first buyers of Century New Mine are the Mercuria Energy deal and Transamine Trading, both of which signed preliminary supply delivery agreements with the mine in February 2018 for about 750000 tons. At present, the processing plant of the mine has now been put into operation, and the recruitment of maintenance personnel has also been completed.