Last year was an exciting year for zinc, the best-performing LME metal, with prices surging almost 60 percent. That said, market participants are optimistic about the base metal this year, as supply falls and demand continues to rise.
In November, a growing demand from China and speculations about the US president Trump’s infrastructure plans supported the steepest climb for the metal since 2009, with prices reaching a peak of $2,985 per tonne.
Currently prices are sitting at $2,768.57 per tonne, but analysts and CEO continue to be positive about the metal’s prospects for 2017.
On the supply side, the closure of two main mines in 2015, Century and Lisheen, that together produced approximately 0.6 million tonnes of mined metal, had a big impact on the market.
Production cuts from other mines, including Glencore (LON:GLEN) and Nyrstar (BRE:NYR) also allowed prices to soar. To add to the curbed supply, China has recently ordered the closure of 26 smaller mines due to environmental concerns.
With that in mind, it’s interesting to look at the world’s three top zinc mines and, without further ado, here’s an overview of each of them.
1. Rampura Agucha mine, India
2015 fiscal year production: 640,845 MT contained zinc
The Rampura Agucha mine in Rajasthan, India is the world’s largest zinc mine. The open-cast/underground mine has an ore production capacity of 6.15 million MT per year, and in India’s 2015 fiscal year (April 1, 2014 to March 31, 2015) produced 698,232 MT of mined metal, including 640,845 MT of contained zinc and 57,387 MT of contained lead.
As of the end of March 2015, the mine’s total reserves and resources sat at 103 million MT. Rampura Agucha was first commissioned in 1991, and is currently undergoing an expansion. The expansion will see underground ore production capacity ramp up to 3.75 million MT per year.
Hindustan Zinc (BSE:500188), that owns and operates the mine, recently announced that its zinc mined metal production was 276,000 tonnes, higher by 21 percent compared with the third quarter of the 2016 fiscal year. The company, part of Vedanta Group (LSE:VED), said they are on track to achieve stated guidance of higher mined metal production in 2017 fiscal year compared to the previous year.
2. Red Dog mine, Alaska
2014 production: 596,000 tonnes of zinc
Red Dog is a zinc-lead mine near Kotzebue, Alaska that was developed under a unique agreement between a US subsidiary of Canada’s Teck Resources (NYSE:TECK) and NANA, which is owned by the Iñupiat people of Northwest Alaska. The mine has a payroll of about $52 million, and provides 550 high-paying jobs in an area of the state where full-time work is difficult to secure.
In operation since 1989, Red Dog is now one of the world’s largest producers of zinc concentrate, accounting for 5 percent of global zinc mine production and 79 percent of US zinc production. It is an open-pit, truck-and-loader operation. The original ore zone, called the Main deposit, was exhausted several years ago, and mining is now taking place at the Aqqaluk deposit. Aqqaluk was discovered in the 1990s along with the Qanaiyaq deposit. Teck expects it to provide enough ore for operations to continue until 2031.
Teck reported record annual zinc production of 596,000 tonnes for Red Dog in 2014. The company reported total zinc concentrate production, including their operation in Red Dog and Pend Oreille, at 510,000 tonnes and zinc refined production at 231,000 tonnes for the third quarter of 2016.
3. Mount Isa, Australia
2015 production: 478,000 tonnes of zinc production
Mount Isa Mines, a Glencore (LON:GLEN) company, operates two separate mining and processing streams, copper and zinc-lead silver. Located in Queensland, Mount Isa’s zinc operations include an underground zinc-lead mine, George Fisher, two open pit zinc-lead mines, Black Star Open Pit and Handlebar Hill Open Pit, a concentrator and a lead smelter.
According to the company, the site hosts the world’s largest zinc resource base, as well as the biggest network of underground mine development in the world, and provides work for more than 3,200 employees and contractors.
Glencore recently announced that in the first nine months of 2016 their total own-sourced production was 789,200 tonnes, 30 percent lower than the same period in 2015.
This is an updated version of an article originally published on Zinc Investing News on October 29, 2013.
Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.