Xstrata Zinc has announced it is looking to increase capacity at its MacArthur River Mine (MRM) in the Northern Territory.
The mine, located 900 kilometres south east of Darwin employs about 440 employees and contractors.
The company is investigating an integrated development plan involving its European and Canadian smelters to secure the long-term future of the operation to deal with the decline in traditional markets for the bulk zinc-lead concentrate produced by the mine.
The $900 million plan involves an increase in mine production at MRM, the installation of propriety hydrometallurgy technology at the Xstrata’s San Juan de Nieve smelter in Spain and Nordenham smelter in Germany.
It could potentially lead to further improvements in the Brunswick Lead Smelter in Canada.
The success of the integrated plan depends on the development at MRM, according to Xstrata Zinc Australia chief operating officer Brian Hearne.
“It’s only by increasing production at MRM and reducing unit costs that the overall project is financially viable,” he said.
“We are prepared to increase smelter capacity and invest in this plan in order to create a new, guaranteed market for MRM bulk concentrate and extend the life of mine by 6 years to 2033.”
Under the proposal, mine production at MRM would increase to about 5 million tonnes per year, with a bulk zinc/lead concentrate volume of 800 000 tonnes per annum.
The mine produced 2.2 million tonnes of ore and 384 000 dry metric tonnes of bulk concentrate in 2010.
Hearne said the Imperial Smelting Furnaces that currently consume MRM bulk concentrate now produce less than 6 per cent of the world’s primary zinc and that the market is declining.
“Over 90 per cent of zinc produced globally is produced by electrolytic smelters which cannot use bulk concentrate,” he said.
“This is why the opportunity to supply Xstrata Zinc smelters using new technology that can consume MRM’s bulk concentrate is essential.”
Hearne said after the commencement of MRM as an underground mine in 1995, and its conversion to an open cut mine in 2009, this is the third phase for the mine.
“The open pit operation has already enabled MRM to meet all targeted objectives on production, employment, environmental management and socio-economic benefits for the region,” he said.
A notice of intent for an environmental assessment for the proposed MRM development has been lodged with the Northern Territory government, as well as a concurrent feasibility study.
A scoping study conducted in 2010 has already been confirmed for the proposed development, according to Hearn, and the proposed development will not expand the open pit beyond the current boundary of the bund walls.
He also said there is no intention for further diversions to the McArthur River or Barney Creeek channels.
“It has always been understood that MRM held significant potential reserves so the civil works were planned in such a way to enable the mine’s future expansion subject to approvals,” he said.
The decision to proceed with the proposed development will depend on the ongoing feasibility studies, environmental assessment and associated technology trials in Europe.
Since the initial open pit mining approvals in October 2006, MRM has maintained a good record of environmental performance and committed to over $7 million to support development of the Gulf region and its communities.
It has also increased its indigenous workforce participation by more than 10 per cent.