Last year was an exciting year for zinc, the best-performing LME metal, with prices surging almost 60 percent. Prices are up only about 8 percent since the start of 2017, but many market participants remain optimistic about the base metal this year.
Zinc’s positive performance last year was largely the result of supply concerns caused by the closure of the Century and Lisheen mines. Supply worries have continued in 2017, with LME zinc stockpiles hitting their lowest level since 2009 at the end of June.
That said, demand is also becoming more of an issue — the refined zinc market was in deficit for the first five months of 2017, and speculation is rife that US President Donald Trump’s infrastructure plans could mean demand is set to rise. Currently prices are sitting at just over $2,750 per tonne.
Given those factors, it’s interesting to look at where the world’s zinc comes from. Click to learn about the top zinc-producing countries and companies, or read on for a brief overview of the world’s three largest zinc mines. From India to the US to Australia, key zinc-mining locations can be found around the world.
1. Rampura Agucha mine, India
2017 fiscal year production: 619,981 tonnes of zinc in concentrate
The Rampura Agucha mine in Rajasthan, India is the world’s largest zinc-mining operation. The open-cast/underground mine produced 5.7 million tonnes of ore during the 2017 fiscal year, including 619,981 tonnes of zinc in concentrate and 92,228 tonnes of lead in concentrate.
As of the end of March 2017, the mine’s proven and probable reserves sat at 49.7 million tonnes. Rampura Agucha was first commissioned in 1991, and is operated by Vedanta (LSE:VED) subsidiary Hindustan Zinc (BSE:500188). It is currently undergoing an expansion that will allow it to transition away from open-cast mining. Currently only about 52 percent of production comes from underground mining.
2. Red Dog mine, US
2016 production: 583,000 tonnes of zinc in concentrate
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 (TSX:TECK.B,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 in 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 zinc-mining operations to continue until 2031.
Teck reported record annual zinc in concentrate production of 583,000 tonnes for Red Dog in 2016. Across all its operations the company reported total zinc in concentrate production of 662,000 tonnes and refined zinc production of 312,000 tonnes for the year.
3. Mount Isa operations, Australia
2016 production: 288,200 tonnes of zinc in concentrate
Mount Isa Mines, a Glencore (LSE:GLEN) company, operates two separate mining and processing streams, copper and zinc. Its assets are located near Mount Isa in the Australian state of Queensland, and its zinc operations include the George Fisher underground mine and the Lady Loretta mine, where production is currently suspended. The company also operates a zinc-lead concentrator and filter plant, plus a lead smelter and supporting services.
According to the company, the site hosts Glencore’s largest source of zinc in concentrate, and provides work for more than 3,200 employees and contractors.
Glencore’s 2016 production report shows a production drop off of 40 percent from the previous year. The reduced output of 288,200 tonnes of zinc in concentrate was a conscious choice made by Glencore in 2015 to battle falling commodities prices.
This is an updated version of an article originally published by the Investing News Network in 2013.
Securities Disclosure: I, Sivansh Padhy, hold no direct investment interest in any company mentioned in this article.