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