Teck warns more global zinc operations may close due to metal price decline
mineweb.com
Canadian mega miner Teck Cominco CEO Don Lindsay advised analysts Thursday that hefty zinc surplus forecasts may be wrong, as they have proven to be so far this year.
Author: Dorothy Kosich
Posted: Thursday , 24 Jul 2008
RENO, NV -
On the heels of Teck Cominco and Xstrata's decision last week to shutter the Lennard Shelf mine in Western Australia due to a substantial decline in zinc and lead prices , Teck President and CEO Don Lindsay suggested Thursday that a number of other zinc operations will also close down.
In a conference call with analysts, Lindsay noted that Lennard Shelf was closed early due to mining costs versus zinc prices, combined with the additional wallop inflicted by the Australian dollar exchange rate.
"We think there are a number of operations out there that are vulnerable," Lindsay advised. "In some cases they are one-mine companies. It's their main operation and sometimes it takes a little bit longer for people to bite the bullet and close down."
"Ultimately if the zinc prices stays in the current range, we think there will be other shutdowns," Lindsay suggested.
Nevertheless, Lindsay questions the validity of year-end zinc forecasts which substantially miscalculated the total amount of global zinc surplus tonnage. For instance, predictions at the end of 2007 said the zinc surplus this year would be as much as 400,000 to 500,000 metric tons. "It now looks as if it is about half that or perhaps less."
As predictions are already being made by analysts for a 2009 surplus of as much as 500,000 metric tons, Lindsay declared," It wouldn't surprise me if the 2009 numbers turn out to be materially less than are currently forecast just because there will be a number of shutdowns between now and then. We just can't predict when."
Teck Vice President, Concentrate Marketing, Andrew Stonkus told analysts that the company's orders "have been very strong so far this year." Teck has already sold out its zinc and copper metal concentrates. |
