Think zinc: miners bet big on revival in key base metal market

Wed Aug 24, 2016 3:12am EDT
 
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* Production drying up at big zinc mines

* That is curbing oversupply, boosting prices

* Zinc market up nearly 50 pct this year

* Miners rushing to invest in new zinc output

* But some analysts caution that demand could ease in second-half

By James Regan

SYDNEY, Aug 24 (Reuters) - 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.   Continued...