Less than two weeks ago, we wrote that recent problems in the mining sector have hit zinc and nickel the hardest. Several mines have reported difficulties with higher costs and troubles with potential outputs and expansions, not to mention dilemmas from lower prices. Now, Purchasing.com reports that a Canadian zinc mine finally had to shut down: “HudBay Minerals of Winnipeg, Manitoba has closed its Balmat, N.Y., zinc mine and concentrator, a victim of slumping zinc prices which have dropped from an average $2.12/lb in the U.S. in December 2006 to 83 ¢ in August, according to Purchasingdata.com.”
Other market conditions kept the mine from making money this year: “The Balmat mine was reopened in 2005 based on a feasibility plan that assumed lower costs and higher levels of production,” a press release from the company reads. As 2008 progresses, most zinc mines realize that lower costs are impossible.
However, the mines in Balmat don’t expect the closure to cause additional costs for the HudBay company, and the company estimates that HudBay’s total zinc production for 2008 should still meet the company’s “production guidance range,” reaching 120,000 to 150,000 tons of zinc. This includes zinc from the past eight months at Balmat.