Zinc, Lead, Silver

Content maintained by Keith Porritt

• Zinc, Lead, Silver
• Resources
• Zinc
• Lead
• Silver
• Accessible EDR
• JORC Reserves
• Exploration
• Production
• World Ranking
• Industry Developments

Zinc (Zn) is the 23rd most abundant element in the earth's crust the fourth most common metal in use after iron, aluminium and copper. The construction and appliance manufacturing industries use large amounts of zinc, mainly as anti-corrosion coatings (galvanizing) on sheet steel, steel beams and vehicle panels. World-wide, around 4 Mt of zinc is used annually to protect around 100 Mt of steel, representing almost half of the world's total consumption of zinc. The widespread use of zinc as a protective coating is due mainly to its resistance to normal weathering. This is an electrochemical reaction known as galvanic action. Zinc is used also in brass, alloy die cast precision components, pigments, salts, as oxide additives to rubber and for agricultural chemicals as well as for wrought or rolled products. Zinc metal is produced in Australia at Sun Metals' Townsville refinery in Qld and at Nyrstar NV's Hobart refinery in Tas.

The widespread occurrence of lead (Pb), its relatively simple extraction and combination of desirable properties have made it useful to humans since at least 5000 BC. In deposits mined today, lead (in the form of galena, PbS) is usually associated with zinc, silver (Ag) and commonly copper (Cu) and is extracted as a co-product of those metals. The largest use is in batteries for vehicles and communications. Less important uses include cable sheathing, solder, casting alloys, chemical compounds, ammunition, ceramics and glass in TV and computer screens for radiation protection. Uses for lead could increase in the future in large storage batteries used for load-levelling of electrical power and in electric vehicles. More than half of the lead currently used is from recycling, rather than mining. Lead recycling plants jointly owned by Nyrstar NV and the Sims Group are in Melbourne, Vic and in Sydney, NSW. Nyrstar NV's Port Pirie smelter in SA is the world's largest primary lead smelting facility and a leading global silver producer.

The relative scarcity, attractive appearance and malleability of silver (Ag) make it suitable for use in jewellery, ornaments and silverware. Its extensive use in coins throughout history has declined over the past 40 years. In Australia, the 1966 50 cent piece was the last coin in general use to contain silver (80% Ag, 20% Cu). Silver is mined and produced mainly as a co-product of copper, lead, zinc and, to a lesser extent, gold (Au). Currently, photographic paper and film followed by the electronics and jewellery/tableware industries are the most important users of silver. Other uses include mirrors, as an anti-bacterial agent, for example in water treatment (as an ioniser with copper in domestic swimming pools) and for biocide and bacteriostatic activity in plastic and textiles formulations.

Australia's total resources of zinc, lead and silver remained relatively stable in 2007. Total identified resources of zinc fell slightly from 87 Mt in 2006 to 86 Mt, lead from 54 Mt in 2006 to 53 Mt but silver increased slightly from 107 kt in 2006 to 110 kt.

Australian EDR of zinc at 42.5 Mt is the world's largest holding, accounting for almost 24% of world EDR. The 2 Mt increase in national EDR compared to 2006 was mostly in Qld from the Mt Isa, George Fisher and Cannington mines. Queensland continued to hold the largest resource with 27.4 Mt or 64% of national EDR predominantly at the Mt Isa, Century and George Fisher deposits. The NT again had the second largest EDR with 10.2 Mt or 24% of national EDR all at the McArthur River deposit followed by NSW with 2.2 Mt EDR, mostly at Broken Hill and Endeavor, and WA with1.8 Mt.

Paramarginal demonstrated resources of zinc increased slightly to 18.3 Mt while submarginal demonstrated resources fell slightly to 2.3 Mt. Total inferred zinc resources decreased from 27 Mt in 2006 to 23 Mt in 2007.

Australia's EDR of lead decreased slightly in 2007 to 23.3 Mt of contained lead and constituted 44% of Australia's total identified lead resources (52.8 Mt). Australia also contains the largest share of world EDR for lead at 30%. Queensland retained the top ranking with its EDR increasing from 14.9 Mt in 2006 to 15.6 Mt in 2007, representing a 67% share of national EDR. In the NT, EDR decreased from 5 Mt to 4.9 Mt or 21% of the national total due to depletion of resources as a result of production at the McArthur River mine. New South Wales recorded an increase in EDR from 1.2 Mt in 2006 to 1.6 Mt because of increased resources at Broken Hill. A decrease in reported EDR for WA from 2.1 Mt in 2006 to 1 Mt is due largely to a reassessment of resources for the Magellan mine.

Australia's paramarginal demonstrated resources of lead increased slightly to 8.5 Mt, which is 16% of total identified resources. Submarginal demonstrated resources decreased from 2.6 Mt in 2006 to 1.6 Mt or 3% of total identified resources. Total inferred lead resources were largely unchanged in 2007 at 19.3 Mt.

EDR for silver is 50 kt which is 17% of world EDR. Queensland has 32 kt or 65% of Australian EDR, mainly in the Cannington, George Fisher, Mt Isa, Century, and Mungana deposits. Most other holdings occur in SA with 8 kt, most of which is at Olympic Dam with some at Prominent Hill, the NT with 5 kt, largely at McArthur River and partly Browns, NSW with 3 kt, largely Broken Hill and Endeavor, and WA with 1 kt, predominantly at Spinifex Ridge, Golden Grove and Jaguar.

All zinc, lead and silver EDR is accessible.

Of Australia's EDR of zinc, 52% occurs in the JORC Code ore reserves categories. The remaining EDR is made up of those measured and indicated resources as reported by mining companies which Geoscience Australia considers will be economic over the long term. The zinc resource life using national EDR divided by annual production is 28 years, but using the ore reserve and dividing by annual production gives a resource life of only 15 years.

Of Australia's EDR of lead, 45% occurs in the JORC Code ore reserves categories. For lead, the national EDR/production ratio is 36 years, but if the ore reserve/production ratio is used it is 17 years. For silver, JORC Code reserves account for around 52% of EDR and resource life is 27 years by EDR or 14 years by reserves.

In 2007, exploration spending on zinc-lead-silver was $187 million, $86 million or 86% higher than in 2006. The 2007 expenditure was 27% of total base metal expenditure of $702 million compared to 24% in 2006. Expenditure on exploration for zinc-lead-silver made up 9% of all mineral exploration which, excluding petroleum, was $2.06 billion, and compared to 7% in 2006. Western Australia, Qld, SA and NSW were the focus of most of this exploration expenditure with WA accounting for $60 million or 32% of all zinc-lead-silver exploration. The WA expenditure was mainly directed at resource definition drilling at Golden Grove as well as the search for further volcanic hosted massive sulphide (VHMS) style mineralisation and for sediment or carbonate hosted sulphide style mineralisation. For example, Kagara Ltd commenced a $15 million drilling program at the Admiral Bay zinc project in May 2007.

The 2007 Australian mine production of zinc, lead and silver was 1.5 Mt, 0.64 Mt and 1.9 kt respectively. Compared to 2006, production in 2007 increased by 152 kt or 11% for zinc and by 153 t or 9% for silver but was down by 27 kt or 4% for lead. The increased production for zinc and silver largely reflects the completion of mine and processing capacity development projects which had caused concomitant outages in 2006. The majority of production was from Qld which contributed 879 kt, or 58% to national zinc production for 2007 (up 55 kt on 2006) along with 460 kt or 72% of lead (up 30 kt), and 1.5 kt or 81% of silver. Western Australia produced 182 kt of zinc and 47 kt lead while NSW produced 126 kt zinc and 72 kt lead, the NT 139 kt zinc and 33 kt lead and Tas 102 kt zinc and 30 kt lead.

The Century zinc mine which is located approximately 250 km north of Mt Isa, close to the Gulf of Carpentaria in north west Qld ranks second globally in zinc production. Century produced 502 kt of zinc and 38 kt of lead as metal-in-concentrate in 2006-07. The Cannington mine, also located in north west Qld, is the world's largest and lowest cost single mine producer of both silver and lead and a significant producer of zinc. Cannington produced 211 kt of lead, 0.9 kt of silver and 46 kt zinc in 2006-07. Also in Qld are Xstrata's Mt Isa mines which produced 227 kt of zinc, 126 kt of lead and 0.2 kt of silver in 2007.

The value of Australia's exports of zinc concentrates and refined zinc in 2007 totalled $4.2 billion, 11% more than the $3.8 billion in 2006 and 2% of the value of total merchandise exports. The increase reflects the higher zinc production in 2007 and consequent higher volume of exports which were up by 14% to 1.5 Mt compared to 1.3 Mt in 2006. The average price for zinc in 2007 was $4382/t, 1% higher than the average of $4343/t in 2006 although, the 2007 December quarter average price was 18% less than for the December quarter in 2006.

Exports of lead totalled 620 kt in 2007, down 7% on 2006. However, the value of the 2007 exports was 50% higher at $2 billion compared to $1.4 billion in 2006. The difference was due to the average price being 64% higher at $3283/t compared to the average of $1996/t in 2006. The value of Australia's mine production of silver was just under $1 billion in 2007.

Based on USGS data for other countries, Australia has the world's largest EDR of both zinc (24%) and lead (30%). Australia has the world's second largest EDR of silver (17%) behind Poland (18%). In terms of production, Australia ranks second for lead and zinc after China and fourth for silver after Peru, Mexico and China.

Mt Isa and George Fisher (Qld): Record zinc-lead mine production was achieved in 2007, with the Black Star open cut producing 2.3 Mt of ore, a 12% increase on 2006, and the George Fisher underground mine producing 2.8 Mt of ore, up by 8% on 2006. A fire in the zinc-lead concentrator feed system in September 2007 reduced production by 13 kt of zinc and 7 kt of lead.

Ore production at George Fisher is expected to increase further in 2008 as hoisting capacity is supplemented with ore trucked out through the George Fisher South decline and a new decline which will link George Fisher North with the surface. A new tailings filter plant and a paste-fill plant will allow for increased backfill to match increased ore production.

In June 2007, Xstrata Plc approved US$61 million to develop the Handlebar Hill open cut zinc-lead mine 20 km north of Mt Isa. Recent drilling, metallurgical testing and design work confirmed an open pit reserve of 4.3 Mt at 7% Zn and 2% Pb. From mid 2008, ore will be mined at a rate of up to 1.75 Mtpa, crushed nearby at George Fisher and transported by truck to the Mount Isa zinc-lead concentrator.

The US$150 million expansion of the zinc-lead concentrator to a capacity of 8 Mtpa continued during 2007 and full production rates are scheduled for the last quarter of 2008. The successful completion of this project will see production increase to 340 kt of zinc, effectively doubling output since Xstrata Plc acquired MIM in 2003.

McArthur River (NT): Production for 2007 was 138 kt zinc in concentrate and 33 kt lead in concentrate. The ongoing development of the open pit at McArthur River mine continued on schedule with various stages of mining and stripping to support increased production in 2008 and included the mining of lower grade transitional ore. Xstrata Plc reported the Barney Creek diversion was 99% complete while the McArthur River rechannelling was 95% complete and would be finished in the second quarter of 2008 following the wet season. The bund wall is due to be completed in the third quarter of 2008. In January 2007, Xstrata approved plans to increase the capacity of the concentrator at the mine from 1.8 Mtpa to 2.5 Mtpa of ore for a capital cost of US$37 million. It is anticipated that the expanded capacity will be commissioned in the third quarter of 2008. A court decision on a technical point of law about a mine application form lodged in 2002 saw mining and development cease for four days at the beginning of May 2007.

Century (Qld): Zinifex Limited announced plans to spend $50 million at Century on works aimed at increasing zinc recovery in the concentrator by 2 per cent. Zinc concentrate production in 2006-07 was 502 kt or 14 kt lower than the previous year because of planned maintenance and an unplanned rake failure in a thickener. Lead in concentrate was down substantially from 84 kt to 38 kt, due largely to lower lead grades in the ore mined. As part of the planned accelerated stripping program, stripping costs peaked in 2007 but will decline progressively as waste stripping reduces over the remaining expected life of the Century ore body to 2015.

Port Pirie smelter (SA) and Hobart refinery (Tas): During 2007 ownership of and operational responsibility for Zinifex Limited's zinc, lead and silver smelting and alloying operations was merged with Belgian company Umicore to form a new company, Nyrstar NV, the world's largest producer of zinc metal.

Cannington (Qld): In January 2007, BHP Billiton completed a six-month US$30 million accelerated program of decline and stope access rehabilitation to improve safety conditions at the southern zone of the Cannington silver-lead-zinc underground mine. Subsequently, production returned to expected levels from a 20% reduction in 2006-07.

Golden Grove (WA): Oxiana Limited (now renamed OZ Minerals Limited) reported that high grade extensions to mineralisation were delineated by drilling beneath the Gossan Hill orebody complex at Xantho and below the Scuddles mine to an area named Cervantes. As a result, expansion studies are being conducted to investigate possible extensions of the underground mine to provide for zinc and copper production through to 2020. Xantho could be capable of producing high grade copper and zinc ore at a rate of 300-500 ktpa once developed. With the addition of Cervantes ore, Scuddles could continue to produce zinc and copper ore at 200 ktpa to 300 ktpa for at least the next 10 years. Milling circuit studies identified the potential to increase throughput by 50% with modest capital expenditure. Above the Gossan Hill mine, studies indicate open-pit mining is viable for 3 Mt of oxide ore at 2% Cu, 8 Mt of sulphide ore at 2% Cu and 0.9 Mt of gold oxide ore at 3.2 g/t Au and 91 g/t Ag.

Rasp - CML7 (NSW): CBH Resources Limited reported the access decline to the Broken Hill Western Mineralisation, which is a previously unmined zinc lode, continued on budget and on schedule having reached 1.4 km of 2.1 km in length by the end of 2007. The decline, which starts in the old Kintore open pit in the centre of the Main Lode, provides access for bulk samples and infill drilling for a feasibility study into a 750 ktpa operation. The initial mine life would be five to seven years producing 65 ktpa zinc concentrate (50% Zn), 35 ktpa lead concentrate (70% Pb) and 0.8 Mozs Ag annually (in the lead concentrate). The resource estimate above 400 m is 5.6 Mt at 5.1% Zn, 3.8% Pb and 45g/t Ag. This increases to 10.1 Mt at 4.9% Zn, 3.5% Pb and 43g/t Ag, to a depth of 800 m. Underground drilling from the decline so far has confirmed adjacent high grade remnant Main Lode ore blocks partially mined prior to the 1930's by small inefficient mines. Intersections include 7m at 20.8% Zn, 15.6% Pb and 678 g/t Ag.

Potosi (NSW): During 2007, Perilya Limited advanced the Potosi exploration decline 997 m from the bottom of the Potosi open pit at Broken Hill. 12 kt of ore was mined from development and trial stoping activities. Potosi ore tonnages are expected to increase to 200-300 ktpa over 30 months from a currently delineated inferred resource of 2.36 Mt with combined metal grades improving from 6.5% on Level 2 to more than 12.5% at depth.

North Mine (NSW): In December, Perilya Limited announced the decision to proceed with a six month feasibility study at Broken Hill for the development of the North Mine Deeps project which has a mineral resource of 3.7 Mt at 11.3% Zn, 13.5% Pb and 219 g/t Ag and extends down to 1800 m. Also at Broken Hill, Perilya is seeking development approval for an open cut to develop the Flying Doctor section of the northern lease where a resource of 0.52 Mt at 5.4% Zn, 7.1% Pb, and 10.4g/t Ag has been identified.

Beltana (SA): During 2007 Perilya Limited developed its Beltana high grade, direct shippable zinc oxide open pit as the first phase of its Flinders project. Mining to the final design depth of 100 m below surface and all crushing operations at Beltana were completed in January 2008. A total of 316 kt of zinc silicate ore was mined and stockpiled at an average grade of 32% zinc, for a total of 101 kt of contained zinc. Sales of the ore stockpiled are expected to take place over 2 to 3 years. The first two shipments comprising 7 kt contained zinc were sold to a Chinese customer in late in 2007. A two year sale agreement has been signed for a third of the ore to be processing at a smelter in Thailand. Perilya Limited also plans to develop the Reliance, Moolooloo, Aristotle and Aroona2 deposits, located within 15 km of the Beltana operation. Resource development drilling was undertaken at the Reliance deposit during 2007.

Jaguar (WA): Jabiru Metals Limited reported the Jaguar project had progressed on time and under budget, with the final cost being $69 million for the 300 m deep underground mine development and the construction of the concentrator, including increased throughput capacity from 350 ktpa to 420 ktpa, and camp and infrastructure. The mine is expected to produce around 33.6 ktpa zinc and 9.6 ktpa copper plus 0.9 Mozs/a of silver from reserves of 1.6 Mt at 3.1% Cu, 11.7% Zn, 0.72% Pb and 120 g/t Ag. The first two shipments of zinc concentrate (48% Zn) were dispatched to smelters in Asia during late 2007 and copper concentrate (20% Cu and 540 g/t Ag) was accumulated for shipment in February 2008.

Angas (SA): Terramin Australia Limited commenced construction of its $64 million Angas zinc mine located 46 km south east of Adelaide following approval in March of the mining and rehabilitation plan by the SA government. Angas is forecast to produce 320 kt of zinc concentrate (52% Zn) and 125 kt of lead concentrate (50% Pb, 4.5% Cu, 450 g/t Ag and 7 g/t Au) over its seven year life from a probable reserve of 2.34 Mt at 8.1% Zn, 3.1% Pb, 0.3% Cu, 33 g/t Ag and 0.5 g/t Au. First development ore is expected in January 2008, and first stope ore in June 2008.

Rosebery (Tas): Zinifex Limited (now merged into OZ Minerals Limited) announced a 65% increase in the Rosebery resource base as a result of an accelerated exploration and delineation drilling program. Infill drilling is underway to confirm the extent of the potential discovery at Rosebery of new, stacked lenses. Ore has been mined at Rosebery for more than a century, including more than 70 years at the current site. Although Rosebery has had a mine life of between four and six years for many years, this new resource discovery now extends mine life to at least 2018.

Mungana (Qld): Kagara Ltd received environmental approvals and expects commissioning to take place in February 2009. The Mungana plant should produce 50 kt of zinc and 8 kt of copper annually, along with silver, gold and lead by-products from a probable reserve of 1.35 Mt at 11.8% Zn, 2% Cu, 1.1% Pb, 124 g/t Ag and 1 g/t Au. By the end of 2007 the decline had advanced 2417 m from the portal, long lead time items such as ball mills and filters had been purchased and delivered and an accommodation village had been built in Chillagoe. Total development costs are anticipated to be $80 million.

Pillara (WA): Teck Cominco Limited and Xstrata Plc in a 50/50 joint venture recommenced production at Lennard Shelf in early 2007. The operation had been on care and maintenance since October 2003. During 2007, 42 kt of zinc and 12 kt of lead was produced. The tonnage of ore mined and milled was broadly in line with expectations but lower zinc grades in the ore mined resulted in lower zinc concentrate production. A new zone, Pillara West was discovered about 400m west of existing underground workings with average grades of 6% to 7% Zn, which is typical of the Pillara area. With the subsequent fall in the price of zinc, the mine has returned to care and maintenance.

Woodlawn (NSW): Tri Origin Minerals Ltd commenced a bankable feasibility study for the Woodlawn underground project, targeting an initial mine life of eight years and an ore production rate of approximately 400 ktpa for 80 ktpa of zinc, copper and lead concentrates from 8.5 Mt of measured and indicated resources at 10.3% Zn, 4% Pb, 1.8% Cu, 0.53 g/t Au and 86 g/t Ag. The study also encompasses the Woodlawn retreatment project comprising approximately 10 Mt of tailings, which, at a processing rate of 1.5 Mtpa, are expected to yield approximately 60 ktpa of zinc and copper concentrates.

Magellan (WA): In 2007, exports of lead concentrate through the port of Esperance were suspended following emissions of lead carbonate concentrate dust during bulk loading of the product into ships. The mine went under temporary care and maintenance during the development and approval of a sealed shipping process to transport the lead concentrate for export from the Port of Fremantle using double lined sealed bags in locked shipping containers. Draft approval conditions require Magellan Metals Pty Ltd to lodge a $5 million bond and fund an independent auditor.