China stainless steel mogul fights to avoid a second collapse
A debt crisis is threatening the future of one of the world’s top stainless steel producers, Jiangsu Delong Nickel Industry.
Brazil’s Nexa Resources (TSX, NYSE: NEXA) has suspended operations at its Extremo Norte underground mine in Minas Gerais state, which is part of the Vazante unit, after detecting unusual ground displacements on the site.
The issue, detected during a regular mine inspection, should not significantly affect production in the first quarter, Nexa said.
The Vazante complex comprises two zinc-lead-silver mines — Vazante and Extremo Norte.
Nexa noted that throughput of the Vazante mine has been increased to mitigate the effects of the stoppage.
“The Extremo Norte mine requires dewatering the aquifer for its operation, which leads to depressurization and may cause local disturbances in the rock mass around the mine,” the company, led by former Vale Canada’s chief executive Tito Martins, said.
“As a preventive measure, activities in this area have been temporarily suspended. No work accidents or environmental impacts have been reported,” Martins noted.
The company said in February it was seeking to expand its copper assets. Nexa is also gearing up to kick off commercial production at its Aripuanã zinc project in Brazil’s Mato Grosso state by 2022.
Once in operation, the $354-million project will become the world’s second-biggest zinc mine, after Teck’s Red Dog mine in Alaska.
Aripuanã zinc equivalent production is estimated at 119kt per year for approximately 11 years. Nexa zinc production in 2020 was 313kt, down 13% from 2019 mainly driven by the decrease in processed ore volumes in Peruvian mines, which were affected by the government-mandated temporary shutdowns in response to the covid-19 pandemic.
News of the mine suspension comes as Shanghai zinc prices jumped on Monday to their highest in more than three years — 22,335 yuan ($3,432.77) a tonne.
Last week, Nexa announced the acquisition of a 9% stake in Tinka Resources (TSXV: TK; US-OTC: TKRFF), which is developing Ayawilca, one of the largest zinc projects in Peru.
