Xstrata Lodges New Mining Plan for McArthur River Zinc Mine

Xstrata Lodges New Mining Plan for McArthur River Zinc Mine

Xstrata Plc, which owns the world’s largest zinc smelter, has lodged a new environmental mining plan for the A$66 million ($49 million) extension of its McArthur River zinc and lead mine in northern Australia.

The plan includes suggestions from the Northern Territory government’s independent adviser Wayne Erskine, a unit of the Zug, Switzerland-based company said in an e-mailed statement. Xstrata’s original proposal was rejected by the Northern Territory government in March.

Miners including Xstrata, which is trying to take over Falconbridge Ltd., are seeking to keep a lid on cost rises of as much as 50 percent in the past four years. Xstrata said in August it would close the McArthur River mine if it didn’t win approval to convert it to an open-pit operation and extend the mine’s life by 25 years.

“The open cut development is still the only way to secure the future of the mine,” said Brian Hearne, general manager of McArthur River Mining, a unit of Xstrata, in the statement. “A range of experts in specialist fields have been commissioned to further investigate many aspects of the proposal.”

Zinc, used as a corrosion-resistant coating for steel, has gained 68 percent this year on the London Metal Exchange. It rose to a record $4,000 a metric ton on May 11, and closed yesterday at $3,200 a ton.

Mining costs have risen by 50 percent across a range of commodities since 2002, Goldman Sachs JBWere Pty. said in a March 27 report.

Xstrata’s plan seeks to switch from underground mining at the site to open cut mining by diverting the McArthur River as the ore body lies beneath it.

Source: www.bloomberg.com

Share this post