MMG shifts from zinc to copper as Las Bambas hits commercial production

JOHANNESBURG (miningweekly.com) – China-owned MMG’s production is shifting from zinc to copper, as mining and processing ends at the Century mine, in North Queensland, and the new major Las Bambas mine, in Peru, starts operating commercially.

Following successful construction, commissioning and ramp-up, Las Bambas produced 87 142 t of copper in concentrate in the second quarter of 2016, taking the mine’s half-year output to 118 612 t of copper concentrate.

Including production from the Golden Grove and Rosebery mines, in Western Australia and Tasmania respectively, MMG produced a total of 90 329 t of copper in concentrate in the June quarter and reported half-year output of 125 844 t of copper in concentrate. 

Total copper cathode production decreased by 11% year-on-year, as a planned shutdown at the Sepon mine, in Laos, offset improved output at the Kinsevere mine, in the Democratic Republic of Congo. The Kinsevere mine produced 20 293 t of copper cathode in the second quarter, a 7% increase on the corresponding quarter, while the Sepon mine produced 17 542 t of copper cathode, a 25% reduction on the same quarter of 2015.

MMG’s zinc production fell by 82% year-on-year, owing to the closure of the Century zinc mine in August 2015 and lower production from Golden Grove and Rosebery. The company produced 28 549 t of zinc in concentrate in the June quarter and reported half-year zinc production of 74 594 t.

The company maintained its 2016 guidance to produce 415 000 t to 477 000 t of copper and 120 000 t to 135 000 t of zinc.

MMG reported that while the market for refined copper and copper concentrate continued to be soft, zinc has continued to be the best performer on the London Metals Exchange this year, with the price up over 30% since the end of 2015.

The group’s exposure to zinc will increase when its Dugald River project, in north-west Queensland, becomes operational, adding an estimated 170 000 t/y of zinc to MMG’s production profile from the first half of 2018.

“Following the end of processing at our own Century mine, in Queensland, earlier this year, Dugald River will provide additional tonnes to the market at a time of shrinking supply,” said CEO Andrew Michelmore in a statement on Thursday.

The expected remaining cost of the Dugald River project to first shipment of concentrate has been reduced by up to $150-million, from $750-million to between $600-million and $620-million. This is the result of an improved development plant and savings secured through strategic sourcing in the mining construction downturn.

The updated development plan for Dugald River was announced in 2015.