Reuters reported that China's Minmetals Resources is unlikely to extend the life of its giant Century zinc mine in Australia much past the pre arranged closure date of mid 2015 removing a major source of concentrate for European markets.

Minmetals said that the Century mine developed in the 1990s is the world's second largest of its kind, but is running out of reserves. Closure of the mine would remove about 15 times the 35,500 tonnes of zinc estimated by the International Lead & Zinc Study Group to be in surplus in January.

Mr Andrew Michelmore CEO of Minmetals Australia arm MMG said that exploration work to extend the life of the Century mine beyond 2015 to 2016 had so far been unsuccessful. It is unlikely at this stage that there will be a major change to that. While we have spent a lot of effort looking for another Century in the same region we have not been successful.

Mr Michelmore said that MMG expects to commit to development of a new zinc project near the Century mine called Dugald River later this year once environmental impact studies are assessed. At its peak, Minmetals estimates Dugald River will produce concentrates containing about of 200,000 tonnes of zinc a year.

He said that earthquake damage to Japanese zinc smelters earlier this month had only caused one shipment of concentrate preparing to unload in Japan to be interrupted with most of Minmetals customers located in Europe.

Mr Michelmore said that the impact for us has been minor. More than 60% of Japan's production capacity of zinc used in automotive steel sheet and construction materials has been suspended since the March 11 quake, which devastated some northern parts of Japan. For our Japanese customers, we are looking to possibly placing that concentrate elsewhere to allow them time to get back into production.

He said that MMG was weighing whether to restart its Avebury nickel mine in Australia which was idled in 2008 when nickel prices dropped below the cost of production.

(Sourced from Reuters)