Century zinc mine begins commercial production
New Century Resources (ASX: NCZ) has kicked off commercial production at its zinc mine in Queensland, Australia, amid forecasts that see prices for the metal climbing in the coming months as restrictions related to the coronavirus pandemic ease.
The Melbourne-based zinc producer, which bought the then mothballed Century mine in 2016, said operations had not been affected by the global pandemic. Instead, Century delivered record production of 34,500 tonnes in the April-June period.
It was the seventh consecutive quarter of increased output and lower costs at the mine, said managing director Patrick Walta.
“From a market perspective, despite the zinc price remaining near four-year lows, a strong decline in spot treatment charges in the quarter has improved conditions for zinc miners,” he noted.
“The company also sees potential for a price rebound due to additional metal demand from increased global infrastructure development linked to covid-19 government stimulus,” Walta said.
Century was the world’s third largest zinc mine prior to its closure in 2016, churning out an average 475,000 tpa of zinc and 50,000 tpa of lead in concentrate products over its history.
“Over 2020, we expect New Century Resources to be a significant driver of growth in Australia,” said Fitch Solutions in its latest industry report.
The analysts believe the operation is on pace to produce roughly 120-132kt a year, based on expected run rates achieved in December 2019, up from 94kt in 2019.
Fitch also notes that the operation has the potential for further expansion, which is currently being evaluated. A feasibility study is expected in the second half of the year.
In May, Century entered into a 60-day exclusivity period with Vale (NYSE: VALE) to complete due diligence and negotiate the acquisition of 95% of the Brazilian miner’s nickel and cobalt operations on the Pacific island of New Caledonia.
Vale Nouvelle Calédonie (VNC) owns and operates the troubled Goro nickel-cobalt mine on the French territory, which has proven a financial burden for Vale since it began operations two years behind schedule in 2010.
According to New Century, integrating Goro into its portfolio would make it a major supplier of nickel and cobalt sourced from outside the Democratic Republic of Congo. The African country is currently the world’s biggest supplier of cobalt for the electric vehicles (EVs) sector.
Details on the transaction will be released in the second-half of July, Century said.