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Gold is up approximately 28% year to date, with gains underpinned by central bank buying, the Fed’s pivot and geopolitical tensions.
The start of zinc concentrate production at Russia’s new Ozernoye mine will be delayed until at least the third quarter of 2024 and a ramp-up to full capacity until 2025, the mine operator said on Monday.
The mine, which was originally due to start production by the end of 2023, was expected to be one of the main drivers of global mine production growth this year, industry association ILZSG said in October.
However, a fire damaged the imported equipment in a part of Ozernoye’s plant in November, while US sanctions imposed on the company in December have made it hard to find a replacement abroad, two sources familiar with the matter told Reuters.
“The flotation part of the plant with imported equipment was damaged in the fire. As a result, the technological scheme will be based on flotation equipment that the company has developed by its own design bureau,” the company told Reuters.
“The quality of concentrate will not be affected by these changes,” it added.
The project, which would be Russia’s largest zinc mine, is designed to produce up to 350,000 metric tons of zinc in zinc concentrate. It is already mining ore and stockpiling it until the plant is ready to process it.
Washington’s sanctions cemented Ozernoye’s dependence on future demand in top consumer China, where the construction sector, a major consumer of steel galvanised with zinc, has had patchy post-pandemic recovery.
Weak demand and the global market surplus, which the ILZSG estimated at 211,000 metric tons in January-November, have pushed zinc prices down 25% over the last 12 months.
Delayed Ozernoye’s production will not be able to materially change this picture. Macquarie said that its analysts had updated their estimates to reflect Ozernoye’s delay but still expect the global refined zinc market to remain in oversupply this year.
(By Polina Devitt and Julian Luk; Editing by Christina Fincher and by Sandra Maler)
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