Bisha, Eritrea
Photo by: Nevsun Resources
VANCOUVER (miningweekly.com) – Canadian base metals producer Nevsun Resources has sold and shipped the first 10 000 t of zinc concentrate from its flagship Bisha mine, in Eritrea.
The shipment was loaded at the Port of Massawa and sailed on September 7, after being sold on the spot market, attracting multiple offers and highly competitive treatment charges, the company said.
“We are pleased to have a high-quality zinc product coming to market in an environment of rising zinc prices. Bisha is the only significant new zinc concentrate coming to market in 2016 and we are being aggressively courted for offtake by various customers. We would like to congratulate our partner, the State of Eritrea, for adding another export product to the economy and thank them for their support,” Nevsun CEO Cliff Davis commented.
The milestone followed the completion, earlier this year, of an $80-million plant expansion to add a zinc circuit capable of processing more than 225-million pounds of zinc and 45-million pounds of copper a year.
It also has surplus capacity to absorb additional feed that might come from satellite deposits from yet to be defined mineral reserves from Bisha deeps, Harena or Asheli.
SUPPLY GAP
Zinc prices for delivery in three months have appreciated by 46% to $2 291.50/t since the start of the year, spurred higher by an emerging supply gap.
The closure of major zinc-producing mines such as Century and Lisheen, as well as production cuts owing to low zinc prices, are expected to lead to a decrease in 2016 mine production. Higher prices are, however, expected to bring a large amount of Chinese mine production back on line in 2017, while Glencore is likely to also bring some production back.
Nevertheless, deficits of about 500 000 t/y in 2016 and 2017 are still expected to result in a drawdown of stocks.
According to research and consultancy group Wood Mackenzie, the outlook for the zinc market over the next few years is positive, with the price forecast to reach a cyclical high of more than $3 800/t in 2018.
Nevsun is scheduled to load further zinc shipments in the coming weeks and is ramping up to commercial production, which is expected to occur in the fourth quarter.