MILAN, April 12 (Reuters) - Expansion of zinc mining operations in Australia will help mining group Xstrata and commodities trader Glencore to keep zinc market leadership after their planned merger, offsetting output cuts in Canada, a senior Xstrata manager said.
A full merger of Glencore and Xstrata, now before shareholders, will make the group the world’s biggest zinc producer, with a controlled output of about 1.6 million tonnes and a 16 percent share of global zinc ore production.
But in 2013, the Xstrata-owned Brunswick and Perseverance mines in Canada will run dry, removing about half a million tonnes of zinc from the global system.
“We are trying to make that up with expansion in ore mines,” Emilio Tamargo, general manager for business development and research at Xstrata’s zinc unit, told Reuters on the sidelines of a conference organised by Metal Bulletin.
“I think total capacity we are working on is about half a million tonnes which more or less will compensate what we are losing,” Tamargo said.
Xstrata expects to complete expansion of its Mount Isa mining operations and start up Lady Loretta mine in Australia next year, he said.
Lady Loretta is expected to have an annual production of 126,000 tonnes, according to Xstrata website.
The group is also looking at organic growth in zinc mining in other geographic areas as well as possible acquisitions but has no definite projects on the table at the moment, he said.
Xstrata plans to start up the Bracemac-McLeod zinc mine in Canada, with a 90,000 tonne output, next year.