SYDNEY – Resource companies are racing to dig zinc mines, betting that markets for the metal used to rust-proof steel and protect noses from sunburn have finally turned after a decade in the doldrums.
A supply glut is evaporating as big zinc mines run dry, commodity analysts say, helping drive up prices by nearly half this year and triggering investments in new and long-dormant projects from Greenland to Africa.
“There is a sense of urgency that the zinc price will continue to appreciate in coming years and we want to start construction as soon as possible to take advantage of that,” said Simon Smith, finance manager of Heron Resources, which is spending A$190 million to return a landfill site in Australia to its former life as a zinc mine.
The global supply pool has been contracting as reserves are exhausted at huge mines in Australia, Canada and Ireland, while other major producing nations such as Peru have seen output drop as richer ores are mined out.
Macquarie Bank calculates that global supply has plunged by as much as 14.5 percent in the first half of 2016 alone.
“There is no doubt the supply side of this market is declining and supporting the case for new mines,” said commodities analyst Daniel Morgan of UBS, adding that companies that buy zinc to refine had become “panicky” about supply.
For the rest of this article, click here: http://www.reuters.com/article/us-miners-zinc-resurgence-idUSKCN10Z0YF