Xstrata: may shut Australia mine unless govt acts
reuters.com
Thu Jan 15, 2009 9:14pm EST
By Bruce Hextall
SYDNEY, Jan 16 (Reuters) - Swiss-based miner Xstrata (XTA.L) warned it will be forced to shut its McArthur River lead/zinc project in Australia's Northern Territory before the end of this month unless it gets the all clear from the Australian government to restart mining at the remote site. Xstrata said on Friday it was currently processing stockpiles but these would be used up by Jan. 29 unless mining was resumed.
Mining ceased on Dec. 17 following a decision by the federal court to uphold an earlier finding that the government's approval of a A$110 million ($74 million) open cut mine development at the site was invalid.
Indigenous groups had appealed against the government's approval of Xstrata's plan to divert the McArthur River to allow the open pit to replace a depleted undergound operation.
The current Federal Environment Minister, former rock singer Peter Garrett, now has to re-assess the mine development before deciding whether or not to approve it.
"The minister is currently reviewing all the information he has and is considering whether any additional information is required, mindful of the uncertainty that the federal court decision has given rise to, and he will make a decision as soon as practicable," a spokesman for Garrett said.
Xstrata Zinc chief operating officer Brian Hearne said the minister urgently needed to make a decision as the company would otherwise have no option but to close the operation once current stockpiles of lead and zinc were depleted.
"If we do not have a decision by the federal government on whether we can continue mining at McArthur River by that date, we will unfortunately have no other option than to lay off 300 workers and suspend all operations, putting the operation into care and maintenance for an indefinite period," said Hearne.
The remaining ore stockpile at McArthur River is just 6,000 tonnes while a further 70,000 tonnes of low-grade ore is being recovered from a buried pit.
Before shutting the mine last month, Xstrata had already cut ore production at the mine by 20 percent because of low metals prices, resulting in the loss of 68,000 tonnes of concentrate, containing 31,700 tonnes of zinc metal and 7,200 tonnes of lead. (Editing by James Thornhill)
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