MMG is on track to be producing at the Dugald River zinc operation in Queensland ahead of schedule as it aims to capitalise on a tightening market for the base metal.
Zinc prices have surged more than 20 per cent in 2017, jumping through $US3000 ($3801) a tonne for the first time in a decade this month as stockpiles have declined.
MMG is hopeful that launching production at the $600 million Dugald River project, expected to become one of the world top 10 zinc mines, will enable it to take advantage of the current marketplace.
The Chinese-controlled company has this year focused on reducing debt, while also simplifying and optimising its asset portfolio, as it prepares to bring Dugald River into production later this year.
“Since the beginning of the year, we have completed the sale of Golden Grove, Century and Avebury. We have also made significant progress in the construction of Dugald River,” MMG chief executive officer Jerry Jiao said.
“Dugald River is ahead of schedule with production of first concentrate now expected in late 2017, which is well-timed to meet a tightening zinc market.”
The company previously expected to launch production at Dugald River in the first half of 2018. The high-grade operation has been forecast to produce around 170,000 tonnes of zinc in zinc concentrate, plus by-products, a year.
MMG, in its financial results for the six months to end-June, reported profit of $US113.7 million for the first half of 2017, a $US206.7 million improvement on the same period a year earlier.
The result, according to MMG, was driven by strong output from the Las Bambas mine in Peru, which produced 218,440 tonnes of copper over the six months.
“Increased copper sales volumes from Las Bambas, higher commodity prices and our pursuit of group-wide efficiencies have contributed to the strong financial result for the first half,” Jiao explained.
The company completed a $US210 million sale of the Golden Grove mine in Western Australia to private equity manager, EMR Capital, in February.
Attila Resources acquired the Century zinc mine in Queensland from MMG, also in February. MMG agreed to offload the Avebury nickel mine in Tasmania to Dundas Mining for $25 million last month.