Zinc to stay upZinc to stay up: Zinifex
April 24, 2006
ZINC prices are to stay at record highs, with any response to the shortage in supply likely to be slow, Zinifex chief executive Greig Gailey says.
He said yesterday that the solution for zinc prices was more raw material but it took between three and five years to develop a new zinc mine.
"We have a very large deposit in Queensland called Dugald River, which is about 50 million tonnes," he told the ABC's Inside Business.
"We're currently in the phase of doing a pre-feasibility study but even if we fast-track that project through ... it would not be in the market before 2010 or 2011. There will certainly be a response to price but we believe it will be somewhat slow in coming."
The acute shortage in zinc was sourced in the early 2000s, Mr Gailey said.
"Nobody made any money, companies like Pasminco failed and as a result of that, nobody did any exploration, nobody was interested in developing zinc mines and what we're seeing today is the fruits of that."
Mr Gailey said Zinifex had cash in the bank but had not yet decided whether it would return the capital to shareholders or use it for investment.
Acquisitions were of interest but resources companies were "pretty well priced".
Zinc closed $US250 ($336) higher at $US3325 on Friday.
AAP