Teck Cominco chief predicts zinc mine closures

The head of Teck Cominco, the Canadian mining group, is predicting that zinc prices will begin to rise as the current surplus of the metal forces some marginal mines to close.

The group’s chief executive, Don Lindsay, believes prices will lift in the next year to 22 months, stating: “Zinc will go back up, it’s a question of when.”

Mr Lindsay is predicting that around 10 Western World zinc mines could shut in the next two years.

The company is currently reviewing the future of its two loss making zinc operations and in addition, Xstrata’s Brunswick mine in eastern Canada is projected to run out of reserves in 2010.

The closure of all three mines would reduce supply by 350,000 tonnes.

The price of zinc could also be influenced if China’s chooses to impose a tax on super-high-grade zinc exports.

Mr Lindsay says: “If they do do that, and China becomes a zero sum game relative to the Western World, it won’t be that long before zinc becomes very tight again.”

The London Metal Exchange MZN3 zinc price has fallen from its $4,600 per tonne all-time high in December 2006, to $2,580 a tonne at the beginning of this week.