Mexico
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Blockade, grades weigh on Mexico zinc, lead miners

Bnamericas Published: Thursday, September 12, 2019
Blockade, grades weigh on Mexico zinc, lead miners

Zinc and lead output among Mexico's top miners slumped in Q2, under pressure from a blockade and dwindling grades.

But a rebound could be in the cards with two new projects expected to begin production of the metals in H2. 

ZINC

Mexico's top four zinc miners produced 110,272t in Q2, a drop from 138,013t in the same quarter last year.

 

The main reason was a drop at Newmont Goldcorp's Peñasquito mine – one of the country's biggest gold, silver, lead and zinc producers – which was impacted by a blockade in the quarter.

The mine is ramping up to full operations after the blockade was lifted in June.

Peñasquito produced 11,340t zinc in Q2 (figures are output after the Newmont Mining-Goldcorp merger in April). This compares to 35,154t in the same quarter last year.

All other miners in the list recorded falling zinc output.

Industry leader Industrias Peñoles saw a dip to 69,484t from 71,054t, due to lower grades and recoveries at the Fresnillo and Sabinas mines, and reduced volumes of ore processed at Madero.

Minera Frisco just held on to the third spot following a 15% decline to 11,712t, caused by lower grades and recoveries at the Asiento and San Francisco del Oro assets.

Southern Copper saw a marginal fall in zinc output from its IMMSA Mexican subsidiary.

LEAD

Lead production by Mexico's top three producers slipped to 28,963t from 36,221t in the same quarter last year.

 

As with zinc, the Peñasquito blockade was the key reason behind the dip, with Newmont Goldcorp producing 5,443t of the metal post-merger, down from 12,156t.

Peñoles and Frisco recorded lower lead output due to lower grades at Sabinas and recoveries at Fresnillo (Peñoles) and lower output from Frisco's San Francisco del Oro and Tayahua assets.

OUTLOOK

After a disappointing first half, zinc and lead output may be in for a rebound in H2.

Newmont Goldcorp is pushing ahead with a restart at Peñasquito. While much will depend on how the ramp up progresses, the company has forecast a sharp acceleration in production.

Post-merger 2019 output at Peñasquito is forecast at 81,648t of lead and 111,132t zinc.

In addition, two new projects are due to begin contributing lead and zinc production in H2, which will help offset declining grades at some existing assets.

Peñoles is on the verge of first production at its US$303mn Minera Capela project in Guerrero state. The asset is expected to produce 40,000t/y zinc and 8,600t/y lead, along with silver and copper.

First production remains on track for Q3, the company said in its latest quarterly results report.

Meanwhile Southern said in its Q2 results that operations will begin shortly at the San Martín mine.

The company is concluding a US$87mn overhaul of the asset, where operations have been halted for around 12 years due to a strike.

Output is expected at 14,600t/y zinc (a decline from 20,000t/y previously forecast), along with silver, copper and lead byproducts.

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