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 and the fourth most common metal in use after iron, aluminium and copper. The construction, transport and appliance manufacturing industries use large amounts of zinc, mainly as anti-corrosion coatings (galvanizing) on sheet steel, steel beams, vehicle panels, chain-link fencing, guard rails and light posts. World-wide, around four million tonnes (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 more reactive than iron or steel and thus will attract almost all local oxidation. A protective surface layer of oxide and carbonate forms as the zinc corrodes. Zinc is used also in brass (almost 20% of zinc use), alloys (16%) such as for 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 Queensland (Qld) and at Nyrstar NV's Hobart refinery in Tasmania (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 sometimes copper (Cu) and is extracted as a co-product of those metals. The largest use is in batteries for vehicles which accounts for 80% of modern lead usage. The remaining 20% of applications include underwater cable sheathing, solder, casting alloys, chemical compounds, ammunition, glassware and 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. The growing popularity of electric bikes, particularly in China, has led to the e-bike now consuming more than 8% of world lead production. 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, Victoria and in Sydney, New South Wales (NSW). Nyrstar NV's Port Pirie smelter in South Australia (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 household silverware. Its extensive use in coins throughout history has declined over the past 50 years. In Australia, the 1966 fifty 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 lead, zinc, copper and, to a lesser extent, gold (Au). Currently, jewellery, photographic paper and film, followed by electronics and tableware, are the most important users of silver. Other applications include coatings for mirrors, for biocide and bacteriostatic activity in plastic and textiles formulations and as an anti-bacterial agent in areas such as water treatment including, for example, as an ioniser with copper in domestic swimming pools.

Australia's total resources of zinc, lead and silver remained fairly stable in 2008. Total identified resources of zinc fell slightly from 86 Mt in 2007 to 84 Mt in 2008, lead was unchanged at 53 Mt along with silver which remained at 110 kilotonne (kt).

Australia's Economic Demonstrated Resources (EDR) of zinc at 53 Mt is the world's largest holding, accounting for around 27% of world EDR. The 11 Mt increase in national EDR compared to 2007 is associated with the release of a new resource statement for the Dugald River deposit in Qld and a reassessment of resources at McArthur River in the Northern Territory (NT). Queensland continued to hold the largest resource with 32 Mt, or 60% of national EDR, predominantly at the Mount Isa, George Fisher, Century and Dugald River deposits. The NT again had the second largest EDR with 17 Mt, or 32% of national EDR, all at the McArthur River deposit. Following were NSW with 2 mt EDR, mostly at the Broken Hill and Endeavor deposits, and Western Australia (WA) also with 2 Mt, mostly at the Golden Grove, Sulphur Springs, Jaguar and Pillara deposits. Paramarginal Demonstrated Resources of zinc fell to 7 Mt as a result of resource upgrades for Dugald River and McArthur River. Total inferred zinc resources decreased from 23 Mt in 2007 to 22 Mt in 2008.

Australia's EDR of lead increased by 4 Mt in 2008 to 27 Mt of contained lead and constituted 51% of Australia's total identified lead resources (53 Mt). Australia also contains the largest share of world EDR for lead at 33%. Queensland retained the top ranking with its EDR increasing from 16 Mt in 2007 to 17 Mt in 2008 which represents a 62% share of national EDR. In the NT, EDR increased from 5 Mt to 8 Mt or 32% of the national total as a result of a reassessment of resources at the McArthur River mine. New South Wales recorded a decrease in EDR from 1.6 Mt in 2007 to 1.4 Mt largely because of a decrease in reserves at Endeavor. Australia's Paramarginal Demonstrated Resources of lead decreased by 2 Mt to 7 Mt, which is 13% of total Identified Resources. Total inferred lead resources were largely unchanged in 2008 at 18 Mt.

EDR for silver is 61 kt which is 20% of world EDR. Queensland has 39 kt or 64% of Australian EDR, mainly in the Cannington, Mount Isa, George Fisher, Dugald River and Century deposits. Most other silver EDR occurs in SA (10 kt), the NT (7 kt), NSW (2 kt), WA (2 kt) and Tas (1 kt). In SA, almost all silver EDR is at Olympic Dam with some at Prominent Hill while in the NT silver EDR is largely at McArthur River and partly Browns, in NSW it is mostly at Broken Hill and Endeavor, and in WA, predominantly at Golden Grove, Spinifex Ridge and Jaguar.

All zinc, lead and silver EDR is accessible.

Of Australia's EDR of zinc, 42% 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 and which Geoscience Australia considers will be economic over the long term. The zinc resource life using national EDR divided by annual production is 35 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, 40% occurs in the JORC Code ore reserves categories. For lead, the national EDR/production ratio is 42 years, but if the ore reserve/production ratio is used it is 16 years. For silver, JORC Code reserves account for around 43% of EDR and resource life is 32 years for EDR or 14 years for JORC reserves.

In 2008, exploration spending on zinc-lead-silver was $133 million, 29% lower than in 2007. The 2008 expenditure was 18% of total base metal expenditure of $750 million compared to 27% in 2007. Expenditure on exploration for zinc-lead-silver made up 5% of all mineral exploration which, excluding petroleum, was $2.61 billion, and compared to 9% in 2007. Western Australia, Qld, SA and NSW were the focus of most of this exploration expenditure with WA accounting for $40 million or 30% of all zinc-lead-silver exploration.

The 2008 Australian mine production of zinc, lead and silver was 1.52 Mt, 0.65 Mt and 1.93 kt respectively. Compared to 2007, production in 2008 was relatively stable, increasing only slightly for zinc and lead and increasing by 46 tonne, or 2%, for silver. The majority of production was from Qld which contributed 918 kt, or 60% to national zinc production for 2008 (up 39 kt on 2007) along with 481 kt or 75% of lead (up 21 kt), and 1.6 kt or 82% of silver. Western Australia produced 200 kt of zinc and 25 kt of lead, while NSW produced 141 kt zinc and 71 kt lead, the NT 142 kt zinc and 37 kt lead and Tas 97 kt zinc and 33 kt lead. The Century zinc mine, which is located close to the Gulf of Carpentaria about 250 km north of Mount Isa in northwest Qld, ranks in the top few globally in zinc production. Century produced 514 kt of zinc and 56 kt of lead as metal-in-concentrate in 2008. The Cannington mine, also located in northwest 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 251 kt of lead, 1.1 kt of silver and 61 kt of zinc in 2007-08. Also in Qld are Xstrata's Mount Isa mines which produced 283 kt of zinc, 167 kt of lead and 0.3 kt of silver in 2008.

The value of Australia's exports of zinc concentrates and refined zinc in 2008 totalled $2.3 billion, 45% less than the $4.2 billion in 2007 and 1% of the value of total merchandise exports. Although the tonnage of zinc exports increased by 2% to 1.5 Mt in 2008, the value of these exports was much lower than in 2007 because of lower zinc prices in 2008. The average price for zinc in 2008 was $2 494 a tonne, 43% lower than the average of $4 382 per tonne in 2007. The 2008 December quarter average price was 36% less than for the December quarter in 2007.

Exports of lead totalled 604 kt in 2008, down 3% on 2007. The value of the 2008 exports was 16% lower at $1.7 billion compared to $2 billion in 2007. The difference was the result mostly of the average price for lead being 12% lower at $2886 a tonne compared to the average of $3 283 per tonne in 2007. For silver, the average price was 9% higher at $559 a kilogram (kg) compared to the average of $513/kg in 2007. The value of Australia's mine production of silver was $1.1 billion in 2008 up 11% on 2007.

Based on United States Geological Survey data for other countries, Australia has the world's largest EDR of zinc (27%), lead (33%) and silver (20%). In terms of production, Australia ranks second for lead and zinc after China and fifth for silver after Peru, Mexico, China and Chile.

Mount Isa and George Fisher (Qld): Xstrata Plc's George Fisher mine increased production in 2008 by 10% to 3.1 mt of zinc-lead ore. The completion of the KG53 decline/incline project in September 2008 allowed for production from George Fisher North Upper Level to be trucked to the surface in the fourth quarter of 2008. The first ore was mined at Handlebar Hill open cut in June 2008 and produced 1 mt of ore during the year. The Black Star open cut operation maintained ore production at 2.3 Mt. Throughput at the Mount Isa zinc-lead concentrator increased from 5 mt in 2007 to 6.1 mt in 2008 as the expansion project progressed. Cost savings were achieved through optimising reagent usage and improvements in energy efficiency. In 2008, zinc metal in concentrate rose by 25% to 283 kt. At the Mount Isa lead smelter, production was up by 33% to 167 kt of lead in bullion as a result of increased concentrate feed from the zinc-lead concentrator and increased volumes of third-party lead concentrate feed. Despite these many advances at the Mount Isa and George Fisher zinc-lead operations, an operating loss of US$54 million was reported as declining prices, lower mined grades and higher input costs outweighed the positive impact of higher mined production, increased ore throughput and improved recoveries.

Consequently, a strategic review aimed at optimising efficiency and productivity and securing the long-term future of Mount Isa operations during challenging operating conditions resulted in a restructure plan. This included placing Handlebar Hill on care and maintenance from early February 2009 while production from the large-scale Black Star open pit and the higher grade George Fisher operation will increase by 35% and 13% respectively. Together, and with stockpiled ore from Handlebar Hill, the operations will enable an optimised throughput at the expanded zinc-lead concentrator of 7.3 Mt, 20% higher than in 2008, with improved recoveries and increased operational efficiencies. Xstrata report this strategic operational change will result in a 23% increase in zinc metal output and a 17% increase in lead metal output over 2008 levels. Planned capital expenditure at Mount Isa will be reduced by 83% without impacting on the integrity of operations while further cost savings will be achieved through reducing and deferring the movement of waste material at Black Star by 40%. In total, operating costs at the Mount Isa zinc-lead operations are expected to be reduced by US$35 million or 32% in 2009.

McArthur River (NT): Xstrata reported the open pit development at McArthur River Mine was completed on schedule during 2008. Mining production increased marginally over 2007 levels to 2 Mt. The capacity of the concentrator was increased from 1.8 million tonnes per annum (Mtpa) of ore to 2.5 Mtpa, a design rate achieved in November 2008. Consequently, 2008 throughput increased by 12% to 2.1 Mt. Zinc metal in concentrate increased by 3% to 142 kt, as a result of increased throughput tonnage, but was partially offset by lower feed grade to the mill. Average head grades decreased from 10.2% in 2007 to 9.6% in 2008 in line with the mine plan. Production in December was reduced by approximately 25% in the light of market conditions and all mining and civil works were suspended on 17 December pending expansion re-approval. When stockpiled ore was exhausted on in January 2009, the operation was placed on care and maintenance. On 20 February 2009, the Federal Environment Minister approved the open pit development and operations have recommenced.

OZ Minerals Limited: In June 2008, Zinifex Ltd, the owner of Century, Rosebery and Dugald River, merged with Oxiana Ltd, owner of Golden Grove and Prominent Hill, to form OZ Minerals Ltd as the world's second largest zinc producer. OZ Minerals Ltd faced financial issues soon after it was formed as a result of decreasing commodity prices and high levels of capital expenditure involved with the construction of the Prominent Hill operation and pre-strip mining at Century. In early 2009, a possible solution to OZ Minerals Ltd' refinancing issues came when China Minmetals Non Ferrous Metals Company Ltd (Minmetals) agreed to buy OZ Minerals Ltd. Subsequently, Prominent Hill (located in the Woomera Prohibited Area) was excluded from the Minmetals purchase because the Australian Treasurer would not approve its sale on national security grounds.

Century (Qld): The Century mine is the world's second largest open pit zinc mine. In 2008, 514 kt of zinc in concentrate and 56 kt of lead in concentrate was produced at Century. This was slightly above the previous year's production. During 2008, a new ball mill was installed to enable increased zinc recovery from ore. OZ Minerals Limited reported mining costs were elevated in 2008, mainly because of the large volumes of pre-strip mining required. The Century deposit is covered by a large volume of overburden which requires removal to access the ore. Stripping costs peaked in recent years, but are declining progressively as waste stripping reduces over the remaining expected life of the Century ore body to 2015. Pre-strip mining volumes are expected to be 40% lower in 2009.

Golden Grove (WA): The Golden Grove operation consists of the Scuddles and Gossan Hill zinc and copper underground mines and the Scuddles plant. Total resources increased during 2008 by around 20% following delineation of resources at recent discoveries. Production was slightly increased for 2008 at 140 kt of zinc, 18 kt of copper, 47 755 ounces of gold, 3 million ounces (Moz) of silver and 13 kt of lead. All are contained metal in concentrate. In September 2008 OZ Minerals Ltd announced it was planning to reduce zinc production at its Golden Grove mine by 35-40% and schedule higher copper production as a result of the weak zinc price. A few months later the company announced the Scuddles mine was to be put on care and maintenance in response to market conditions. Expansion studies at Golden Grove to investigate the addition of open pit copper mining and possible extensions of the underground mine were put on hold because of low commodity prices.

Rosebery (Tas): An exploration and delineation drilling program which commenced in 2006, Project
Horizons, has resulted in a 65% increase in resources at Rosebery, potentially extending its mine life beyond 2020. In 2008 metal in concentrate produced was 85 kt of zinc, 29 kt of lead, 2 kt of copper and 30 675 ounces of gold. OZ Minerals Ltd reported replacement of the grinding and flotation circuits at a cost of $125 million and an upgrade of the underground ventilation were both deferred in light of financing difficulties. However, work on a new tailings storage facility proceeded.

Broken Hill (NSW): A bid to merge the Broken Hill operations of CBH Resources Ltd and Perilya Ltd failed to proceed despite cost savings estimated at up to $200 million. Subsequently, Perilya Ltd entered into a financial arrangement in which Shenzhen Zhongjin Lingnan Nonfemet Co Ltd, China's third largest zinc producer, acquired 50.1% of Perilya. Perilya Ltd reviewed its Broken Hill operation in light of the significant fall in metal prices and implemented a plan to resize the operation from 1.8 to 0.95 Mtpa, which is expected to produce 55 kt of zinc and 50 kt of lead. Production was refocused on a lower tonnage, higher grade profile around mining remnant pillars and stopes with low development requirements in the Southern operation. At CBH Resources Rasp operation, the development decline was placed on care and maintenance from June 2008 with 2400 metres (m) of development completed and at a depth of 350 vertical metres below the surface. At its current level the Rasp decline provides access to 70% of the first two years of planned production from three individual working levels within the Western Mineralisation (a previously unmined zinc lode) and from high grade lead lode remnants. Perilya also placed the North Mine and Potosi exploration decline on care and maintenance.

Endeavor (NSW): CBH Resources Ltd reported that a revised mine plan was being adopted at Endeavor with lower mine production at higher grades to minimise cash outflows and remain viable during a period of lower metal prices. Workforce numbers were reduced from 384 to 233 in August 2008 and then to 115 in November 2008. Annualised ore throughput was reduced from 1 Mtpa to 800 kilotonne per annum (ktpa) and then to 420 ktpa in November. Increasing the mine cut off grade at Endeavor resulted in a decrease in the size of the overall mining reserve. Paste backfill operations have been suspended while the mine produces at the 420 ktpa rate. Mine development has been cut back also, a move made possible by significant development carried out in the 2007-08 financial year. Production for 2008 at 47 kt zinc, 22 kt lead and 0.7 Moz silver was similar to 2007.

Angas (SA): Terramin Australia Ltd reported the 400 ktpa operation was commissioned in July 2008 at a cost of $71 million. Angas has a Probable Reserve of 2.4 mt at 7% Zn, 2.7% Pb, 0.2% Cu, 31 grams per tonne (g/t) Ag and 0.5 g/t Au. Over its seven year life, 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). Zinc concentrates are trucked 70 km to Port Adelaide for shipment to Asia while lead-copper-gold-silver concentrates are trucked 200 km to the Nyrstar owned, Port Pirie smelter.

Mungana (Qld): A decline to access the Mungana underground base metal orebody was completed during 2008 with production commencing in September 2008. Construction of a new $80 million base metal concentrator and associated infrastructure commenced at Mungana in May 2008. At the proposed throughput of 350 ktpa at 12% Zn and 2% Cu, Mungana would produce 38 ktpa of zinc, 6 ktpa of copper, 5 ktpa of lead, 38 tonne of silver and 7000 ounces of gold from a reserve of 1.35 mt at 11.8% Zn, 2% Cu, 1.1% Pb, 124 g/t Ag and 1 g/t Au. A strategic review in October 2008 resulted in the prioritisation of higher margin orebodies at Mungana and Balcooma, increasing copper production and deferring the completion of the Mungana base metal plant as a result of the economic downturn. Ore from the Mungana operations is being trucked to the Mount Garnet polymetallic treatment plant. At Mount Garnet, the open pit was completed in June 2008. A portal for the development of the Mount Garnet underground orebody commenced in March 2008 and stoping commenced in February 2009 from an 800 kt reserve grading 7.5% Zn and 0.3% Cu.