Black cloud over world's largest zinc mine

http://www.resourceinvestor.com/News/2010/2/Pages/Black-cloud-over-worlds-largest-zinc-mine.aspx

Guy Bennett

Published 2/25/2010

Teck Resources (TCK.B-T) admitted this week that it may be may be forced to halt operations at Alaska 's Red Dog mine, the world's largest zinc mine, after environmental and native groups appealed a permit issued by the U.S. Environmental Protection Agency (EPA). Red Dog employs 560 people. It also supplies about 80% of the 700,000 metric tons of zinc ore mined in the U.S. With world mine production already down 500,000 tons in 2009, and spot prices up 100% the supply/demand ratio is about to shift. Zinc is the fourth most common metal in use, trailing only iron, aluminum and copper in annual production. Zinc is like table salt: it’s an obligatory seasoning for a variety of metallic dishes. Zinc is used to galvanize steel to prevent corrosion, and in common alloys such as brass, nickelled silver, soldering and battery technologies. The Alaskan villages of Kivalina and Point Hope are claiming that the Red Dog Mine is discharging toxins into a stream used for drinking water. In the next 30 days, the EPA will rule which provisions of the permit are subject to appeal. In order to maintain efficient production rates, Teck will need to open up a new ore deposit, called Aqqaluk. Any permit delay would sink the transition plan to mine the new ore body. Appealing a negative EPA decision could take 2 years. "If we're unable to pre-strip and access Aqqaluk,” says Teck’s general counsel Leonard Manuel, “then the operation could shut down as early as October this year.” This is a significant development for North American zinc producers. But despite the potential opportunity, the zinc picture isn’t all rosy. The London Metal Exchange reports unusually large stock piles of zinc. In 2009, global demand fell by 7.1% with drops in most countries except China , where demand increased 17%. Also interesting to note was that, as reported by the International Lead and Zinc Study Group, zinc mine production in 2009 was 2.7% lower than in 2008, with decreases in Australia , Canada , Chile , China , Peru , Poland and the United States . Nevertheless, the possibility of a shut down at the Red Dog Mine will cause increased interest in junior zinc developers who are close to production... article continues...