Betting on end to glut, miners hunt for new zinc deposits

Mon Nov 4, 2013 3:59pm EST
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* Top miners join search for new zinc projects

* Anticipating a supply deficit will soon replace glut

* Rising demand for rust-proof galvanised steel in China

* As ageing mines close and China demand climbs, zinc price could rise

By James Regan

SYDNEY, Nov 5 (Reuters) - A global hunt is on to find new deposits of zinc as China buys more of the metal to rust-proof new cars and coat steel used to build bridges and skyscrapers.

Multinationals such as Swiss-based Glencore Xstrata , Belgium's Nyrstar and China's MMG are funding new mines from Africa to the Yukon on expectations that an oversupply of zinc will turn into a deficit.

Along with mining veterans such as former Newmont head Pierre Lassonde, who holds a stake in Canada's Foran Mining , they are also investing just as ageing mines accounting for a tenth of world consumption start to shut.

Even old workings are being rehabilitated, including silver-zinc mines built by Hunt brothers Nelson and William in Canada in the 1970s. The Texan duo famously hoarded silver to corner the market and control global prices, only to go bust when silver prices crashed in 1980.   Continued...