Zinc mine re­vived

MMG to in­vest fur­ther $ 1b at Du­gald River near Clon­curry

Townsville Bulletin - - NEWS - TONY RAGGATT busi­ness editor tony. raggatt@ news. com. au

I NFRAS­TRUC­TURE wo r k on the stalled $ 1.5 bil­lion Du­gald River zinc min­ing pro­ject near Clon­curry is ex­pected to re­sume next year af­ter Chi­nese- backed miner MMG Ltd ap­proved an up­dated de­vel­op­ment plan.

The move has been wel­comed by Clon­curry Shire Act­ing Mayor Jane McMil­lan, who en­cour­aged sup­pli­ers to set up in Clon­curry and called for gov­ern­ment in­vest­ment in the re­gion’s roads, rail and air­port in­fra­struc­ture to sup­port de­vel­op­ment.

Work to build the mine’s pro­cess­ing plant was halted in 2013 af­ter the dis­cov­ery of “more chal­leng­ing” geotech­ni­cal and ground con­di­tions.

The com­pany an­nounced yesterday that the up­dated plan for Du­gald River in­cluded a re­duced mine pro­duc­tion rate of 1.5 mil­lion tonnes per an­num, con­struc­tion of a con­cen­tra­tor and lower an­nual pro­duc­tion of about 160,000 tonnes of zinc in zinc con­cen­trate, plus byprod­ucts, over an es­ti­mated 28- year mine life.

This places Du­gald River, when op­er­a­tional, within the world’s top ten zinc mines.

“By tak­ing the time to un­der­stand the unique char­ac­ter­is­tics of the ore body, we now have a ro­bust plan for Du- gald River that max­imises long- term value for share­hold­ers,” MMG CEO An­drew Michel­more said.

“This de­ci­sion re­flects our con­fi­dence in zinc at a time of shrink­ing global sup­ply. Un­der the up­dated plan, Du­gald River will come online at around a time when sig­nif­i­cant global zinc sup­ply will dis­ap­pear through mine clo­sures.”

Pro­duc­tion at MMG’s Cen­tury zinc mine, about 300km north­west of Du­gald River, is due to fin­ish in the third quar­ter of this year as re­serves are ex­hausted, although the com­pany is study­ing the vi­a­bil­ity of ex­tract­ing more zinc from the mine’s tail­ings waste.

While more than $ 670 mil­lion has been in­vested in de­vel­op­ing the un­der­ground mine, MMG said they ex­pected the re­main­ing cost of the pro­ject to first ship­ment of con­cen­trate was around US$ 750 mil­lion ($ 1.04 bil­lion) plus in­ter­est.

Mr Michel­more said con- struc­tion of sur­face in­fra­struc­ture fa­cil­i­ties would start in 2016, with first pro­duc­tion from a Du­gald River con­cen­tra­tor ex­pected dur­ing the first half of 2018.

“The Du­gald River pro­ject would pro­vide 28 years of eco­nomic, em­ploy­ment and rev­enue con­tri­bu­tion to Clon­curry and Queens­land,” Mr Michel­more said.

Cr McMil­lan said the de­vel­op­ment of such a sig­nif­i­cant mine was ex­cit­ing for the shire.

How­ever, she said the re­quired road, rail and air­port in­fra­struc­ture was be­yond the coun­cil’s re­sources.

“We re­ally need to sup­port these things that are hap­pen­ing,” Cr McMil­lan said.

This de­ci­sion re­flects our con­fi­dence in zinc at a time of shrink­ing global sup­ply MMG CEO AN­DREW MICHEL­MORE

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