All mining activities at the giant Century zinc mine in Australia will have ceased by the end of this month.
News that will be greeted with relief by believers in the zinc deficit story, who have had to watch Century's operator MMG push back the fateful closure date many times in the past.
Century has become totemic of zinc's bull narrative of looming shortfall as some of the world's biggest mines come to the end of their natural lives without obvious like-for-like replacements.
Mining activities may be stopping at Century this month but the mill will continue operating into the third quarter, processing stockpiled ore.
This was expected. Largely unexpected was MMG's announcement in April it will then mill another 450,000 tonnes of ore from trial mining activities at the nearby Dugald River project.
That ore grades 13.3 percent zinc, implying almost another 60,000 tonnes of contained metal. It will take between four and six weeks to process that ore, meaning the Century mill might still be producing concentrates into the fourth quarter of this year.
That tonnage windfall is not included in MMG's 2015 production guidance of 320,000-370,000 tonnes for Century, because Century is now, er, closed.
It's only a small deferral in the grand scheme of things but just as the Century closure is totemic of the zinc bull story, so the latest push-back is symptomatic of that story's curiously elastic narrative.
So too is MMG's development work at Dugald River. The mine was originally due to ramp up as Century wound down but the company delayed the start date after encountering more complex ore than anticipated.
Worth noting, therefore, is the fact that MMG hasn't given up on Dugald River. Pre-mining activities are continuing and the company is working on a new mining plan, which would extend mine life but with lower annual output.
Well, at least the Lisheen mine in Ireland is going to close pretty much on schedule in the coming months.
But operator Vedanta Resources has sprung its own surprise on the zinc market, Its Skorpion mine in Namibia was scheduled to close next year but a new mining plan will push that deadline back a couple of years to the company's 2019 financial year (April 2018 to March 2019). Oh, and milling operations will continue into financial 2020 using stockpiled ore.
Skorpion is only a medium-sized producer with capacity of around 150,000 tonnes per year and it is highly unusual in producing zinc metal rather than zinc in concentrates.
It will not therefore offset the loss of Lisheen, which until the last year or so was producing around 175,000 tonnes of contained zinc per year.
That task will fall to Vedanta's new Gamsberg mine, an extension of its existing Black Mountain operations in South Africa. First ore from Gamsberg is expected in 2018 with anticipated long-term production at a rate of 250,000 tonnes per year.
It is proof that producers of any commodity will work to renew their portfolios, particularly when the consensus view is that they will be bringing new capacity on stream in an environment of supply deficit.
And unsurprisingly, the prospect of zinc raw materials deficit and associated higher prices is incentivising others as well.
Take, for example, Energia Minerals, the Australian-listed junior, which is rehabilitating the long-forgotten Gorno mine in northern Italy, precisely to reap the expected zinc bonanza.
Zinc bulls will be unfazed. The numbers, they point out, still point to a shortfall of zinc, albeit one that keeps edging back from imminent to pending.
Stocks of concentrates accumulated over the last few years will initially cushion the market against any evolving shortfall of mined material.
That makes the kinks in zinc's deficit deadline important in terms of attempting to forecast when shortfall, if it ever finally materialises, translates into price reaction, both in the concentrates and the refined metal parts of the market.
And the kinks in the zinc story just keep on multiplying.http://www.reuters.com/article/2015/06/12/zinc-supply-ahome-idUSL5N0YY1XY20150612