Toho Zinc Co., Japan’s third-biggest producer of the metal, will restore full capacity at its Rasp mine in Australia around the middle of this year after improving access to high-grade ore deposits.
Production of zinc concentrate at the site in New South Wales will rise 15 percent from a year earlier to as much as 46,000 metric tons in 2015, said Toshio Shimamura, general manager and executive officer at Tokyo-based Toho’s mineral resources business division.
The company reduced operating rates to 70 percent in October 2013.
The output increase at the Australian mine comes at a time when a global shortage of refined metal is widening and zinc has been the best performer on the London Metal Exchange in the past 12 months.
The International Lead and Zinc Study Group reported a 296,000-ton deficit in 2014, the largest since at least 2007.
“We are restoring production when other producers are closing their mines,” Shimamura said in an interview in Tokyo on Wednesday. “It’s good timing.”
MMG Ltd. will close its Century mine in Australia, which accounts for 4 percent of global mined supply, during the third quarter, Andrew Michelmore, the company’s chief executive officer, said March 11. Vedanta Resources PLC also plans to shut its Lisheen mine in Ireland, cutting supply by 80,000 tons.
The increased production of high-grade ore will help Toho post a profit from the mine operation for the year beginning in April, compared with a ¥2.05 billion loss projected for this fiscal year, Shimamura said.
Zinc for delivery in three months on the LME fell 0.2 percent to $2,081 a ton on Wednesday.
The metal, used to rust-proof steel, has dropped 4.5 percent this year as output from China, the biggest producer, rose 17 percent in the first two months of 2015 after climbing to a record last year. Still, the global deficit will almost double to 584,000 tons this year, widening to as much as 2 million tons in 2017, Bloomberg Intelligence estimates.
Toho started zinc production at the Rasp mine in 2012 after acquiring CBH Resources Ltd., which also operates the Endeavor mine in central New South Wales. Production of zinc concentrate from the two mines declined to 120,200 dry tons last year from originally planned 122,500 tons, according to a company report March 19.
Toho plans to produce 108,039 tons of refined zinc this fiscal year, compared with 115,149 tons a year earlier. Zinc concentrate from the Rasp and Endeavor mines are shipped to the company’s Annaka smelter. Toho also buys zinc concentrate from other mines through contracts.
LATEST BUSINESS STORIES
