A Queensland operation stole the limelight at the first day of Australia’s premier mining conference.
Managing director of New Century Resources Patrick Walta said the zinc project was only days away from production.
Mr Walta presented at the annual Diggers and Dealers Mining Forum in Kalgoorlie where he said Sedgman was commissioning the southern train of the 250m long, 11 storey-high processing plant located in the Gulf of Carpentaria.
New Century Resources’ model of processing the estimated 77Mt of tailings with a 3.1 per cent equivalent zinc resource gave new life to the facility which originally cost Pasminco more than $1.8 billion to plan and build over 10 years.
The operation includes a 300km underground pipeline and a 300,000-tonne bulk storage load-out facility at Karumba.
MMG paid New Century $46 million to take over the environmental liability and assets at Century mine, which included a $39 million inventory, half a dozen dump trucks and a pastoral station with 35,000 head of cattle, as well as mining and environmental approvals and long-term Indigenous agreements.
It made up a large part of the ‘sunk capital’ value which the previous owners were able to write off, Mr Walta said.
“The company restarted 12 months ago and we aim to be a top 10 world zinc producer,” he said. “We now have a market capitalisation of $600 million, are operating in the lowest cost quartile around $2.62/tonne at a quarter the grade and a tenth the costs of established mines, which have running costs at between $25 and $30/tonne.”
Zinc was a ‘vanilla’ section of the mining industry said Mr Walta, who pointed to steady growth, stable demand and uncertain short-term supply.
“This is a $40 billion/year industry, 60 per cent of which is used in galvanising and 50 per cent of that demand comes from China,” he said. “So it is very much part of the steel and middle-class China growth story.
“Demand has been growing at two per cent a year over the last 10 years and is expected to be the same over the next 10 years.
“That’s around 280,000 tonnes a year in new production that needs to be found. Basically production the size of New Century (estimated to be 260,000 tonnes year) each year for the next 10 years.
“There’s talk of a supply ‘wall’ and while there is a project pipeline, they take a long time to develop.”
While the southern processing circuit will be devoted to treating tailings, Mr Walta said the northern circuit could process ore mined from three smaller deposits on the lease including South Block, which has an estimated 6.1Mt resource at 6.8 per cent zinc and lead.
South Block had been off limits to mining until New Century Resources was able to negotiate a profit-sharing arrangement between the Waanyi traditional owners and mining contractor Downer.