OZ Minerals is considering scaling back production at its Century mine and delaying their planned Dugald River project, OZ chief executive Andrew Michelmore said after the company released its third quarter production report.
OZ has been forced to review production at Century, Australia’s largest zinc mine, after the spot price of zinc has fallen nearly 50% in the past year to around US55c a pound.
The cost of zinc production at Century is US61c a pound, with the mine producing more than 500000 t per year.
Zinc prices peaked at over $US2 during 2006.
OZ Minerals is the result of a merger earlier this year between copper and gold miner Oxiana and zinc miner Zinifex, and will become more focused on copper with its Prominent Hill project in South Australia.
Oz has already cut zinc production at its Golden Grove mine in Western Australia in favour of copper.
In the first half of the year global zinc production outpaced demand by around 23000 t, compared to a 37000 t deficit at the same time last year.
The drop in zinc prices and slow in global demand has also meant possible delays to the planned Dugald River mine in Queensland.
A feasibility study for the project is currently underway, and production could be delayed until the price of zinc heads back up.