Mining company MMG Limited has announced it had entered into a $US550 million amended facility agreement with Chinese interests to finance the construction of the Dugald River zinc, lead and silver mine at Cloncurry.
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The company said they had also slashed the cost of the project, with expected remaining cost to first shipment of concentrate reduced from US$750 million to US$600-620million plus interest.
They said this was the result of an improved development plan and savings secured through strategic sourcing in the mining construction downturn.
MMG, owners of Century zinc mine which closed last year, said it had reduced costs, improved mill utilisation, targeted ore with higher geological confidence and lower risk and increased productivity through better mine and operations planning.
The optimised mine plan will now support a 1.7 million tonnes a year plant with annual production of around 170,000 tonnes of zinc concentrate, plus by-products.
MMG Chief Executive Officer Andrew Michelmore said the company remained positive about the long-term fundamentals for zinc.
“With the closure of recent major zinc mines globally, including the end of processing at our own Century mine in Queensland earlier this year, Dugald River will come on line at a time of ever-shrinking global supply,” Mr Michelmore said.
The news comes after the state government has granted Dugald River prescribed project status which is expected to significantly streamline administrative decisions and accelerate the development of the mine.
“We greatly appreciate the strong support from the Queensland Government,” Mr Michelmore said.
“The development of Dugald River and its’ long term operation is expected to provide significant employment and economic benefits to Cloncurry and Queensland for around 30 years.”
MMG said early works have progressed successfully on site with pre-production mine development from two declines carried out throughout 2015 and 2016 and long lead time items have been ordered and key contracts for construction activities finalised.
The company said following confirmation of financing arrangements, construction of the processing plant will commence.
MMG says it expect its first concentrate production to occur in the first half of 2018.