Zinc Investing News

By Daniella D’Alimonte - Exclusive to ZincInvestingNews.com

Australia’s mining sector has been protected during the downward flux in the economy by the  high prices for iron ore, gold and coal. However, the hapless U.S dollar is causing hardship for the country’s mining sector as commodities such as zinc and nickel continue to struggle. Down 6.5 per cent against the Australian dollar since the beginning of the year, the drop is resulting in a serious profit-cut for sales priced in the U.S dollar. 

“If you are selling in U.S. dollars you are hurting,” said Peter Lester, executive general manager of Oz Minerals Ltd, in a Reuters report. 

Oz, the result of a US$3.9 billion merger between Australian miners Oxiana Resources and Zinifex, mines zinc, copper, nickel and gold. 

With steep oil and metal falls continuing on Wall Street, Australian shares are expected to lower.  Decided at a Reserve Bank of Australia policy meeting August 4, cash rates are to remain unchanged at 7.25 per cent.  However, Stuart Smith, a private client advisor at Bell Potter Securities, said in a Forbes interview that he expects they will be cut in October.  He said he believes this will have to happen to prevent the economy from sliding into recession.

Australia’s Silver Swan Group announced zinc and copper finds south of Meekatharra.  This caused share prices to rise US$0.24 from US$0.54 to US$0.78 from July 31 to August 1.  This is fairly modest as prices and volume might have sky-rocketed this time last year, however, the current market prevents such extremes. 

At an intercept of  33 metres it found 1.7 per cent copper, another of 49 metres produced 7.2 per cent zinc.  More results are to be released in the coming weeks, reports The Australian. 

Griffin Mining Ltd. has announced, due to the fall in zinc prices, its first-half results will be affected.   The average price of zinc concentrate has dropped 48 per cent during the period because of zinc’s falling world market prices, said Griffin in a recent Thomson Financial report.  Griffin also claimed the Beijing Olympics have had an effect on the progress of an upgrade it is trying to complete at its Caijiaying Mine.  The finish date, originally slated to be the end of the summer, is now the end of the year.  Interim results are expected by the beginning of September.

The Beijing Olympics is continuing to cause challenges for the Chinese mining sector.  Due to expected electricity and surplus deficits resulting from the Olympics, China will drop its 5 per cent export tax rebates on zinc starting August 1.   This decision is expected to ease the country’s supply of zinc to the global market.  It has already improved the long-term outlook on zinc by 6 per cent, a two-week high in the London Metal Exchange, reported Forbes.  The export tax rebates will also be removed for  high-grade silver, cadmium products and nickel-cadmium batteries beginning August 1.

After a few days of steady falling, and still on the decline,Teck Cominco (TSX: TCK.B) is hovering around US$45 per share.

Don Lindsay, chief executive officer for Teck, is trying to decrease the company’s ties to zinc, said a recent Financial Post report.  Teck is moving towards a future in copper, with a 74 per cent growth over the next three years, coal with Teck’s US$14 billion acquisition of Fording Canadian Coal Trust’s assets,  and oil sands.  Lindsay said he believes zinc is holding the company back, and many analysts believe the company is currently undervalued, reporter the Post.

Zincore Metals Inc. (TSX: ZNC) has announced the completion of an additional nine drill holes at its Yanque deposit.  The deposit is located in the south of Peru.  Zincore announced findings with, at a depth of 13 metres, 7.4 per cent zinc and 15.0 per cent lead at its YA-33 hole alone. 

“This drilling successfully extended the mineralization at Yanque and continued to show the strong lead grades we have seen at Yanque. Yanque and the zinc belt between the Accha and Yanque deposits are the focus of our 2008 exploration programs. Our work remains focused on defining and developing a multi-deposit zinc and lead belt that runs from Accha through to Yanque,” said  Timo Jauristo,  president and CEO for Zincore.

Cia. Minera Antamina SA, operator of the world’s largest copper-zinc mine, may have 28 per cent more recoverable metals than previously estimated according to a recent study completed as part of the mine’s expansion.  Antamina, a Lima-based mine, claimed a resource increase of 1.52 billion tons of minerals with ore grades of 0.93 per cent copper, 0.51 per cent zinc and 10.9 grams of silver per ton, reported Bloomberg.