Reuters reported that China based Minmetals operations could start at its Dugald River zinc mine in Australia in 2014 a year before its massive Century mine closes permanently with the loss of a half a million tonnes of metal per year.

Its board had approved AUD 157 million in pre development work for the new mine ahead of making a final investment decision.

Minmetals expects the lode to yield 200,000 tonnes of zinc in concentrate annually over 22 year operating life. If the project continues to move through the stages as planned, Dugald River could commence zinc production and be cash flow accretive in 2014.

The Century mine, the world's second largest behind the Red Dog mine in Alaska operated by Teck Resources yields around 500,000 tonnes of zinc in concentrate annually.

The Century mine is located near the Dugald River site in northeastern Australia and is scheduled to run dry by around the middle of the decade unless fresh reserves can be found and exploited.

According to the International Lead and Zinc Study Group, the global zinc market was in surplus by 275,000 tonnes in the first 9 months of 2011. Zinc futures traded as high as USD 2,555 per tonne this year but were currently fetching around USD 1,990.

(Sourced from Reuters)