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GENERAL INFORMATION

Zinc
Zinc is the fourth most valuable metal mined after iron, copper and aluminium. The zinc market currently stands at 11.6 million tonnes per annum, of which the majority, 8 million tonnes comes from newly mined metal and the balance comes from recycling. The recycling is dominated by brass and galvanising ashes.

The industry is made up of mines where zinc deposits are exploited, and “smelters” where the metal is produced. The mines have a finite life and can be relatively small in size, whereas the metal production facilities are large capital intensive plants that are built to last indefinitely. The mines ship an intermediate product, or concentrate, to the “smelters”. Furthermore acid as an important by-product and because acid is expensive to transport, metal production facilities tend to be built in industrialised areas where there is a local market for the acid. With rising energy costs, in recent years, the location of new electro-refineries has been influenced by cheap long term power supply.

Mining
Zinc occurs throughout the world but is particularly associated with carbonate rocks and is commonly found with lead. Mines tend to be small underground operations, with the typical grade of 5% to 8% zinc.

Zinc generally occurs as the zinc sulphide mineral, sphalerite. At the mines the ore is crushed and milled then undergoes flotation which is a process which separates out the sphalerite grains to produce a mineral concentrate containing about 58% zinc. The mineral concentrate is then sufficiently valuable to be transported to zinc smelter

Traditionally, Canada, Australia, the USA and Peru have dominated zinc mining however in recent years China has become by far the most important producer having a market share of almost 40% of newly mined zinc. There are few large mines in China and production is dominated by hundreds of small mines. Reliable information on the Chinese zinc mining situation is very hard to obtain.

Most concentrate is sold according to an internationally recognised standard formula that pays a fixed proportion of the zinc contained in the concentrate and a treatment fee charged by the smelters on each tonne of concentrate and which is renegotiated annually.

Production
The conversion of zinc from concentrate to metal is also dominated by China where there has also been a tremendous growth in capacity in recent years. While the number of electro-refineries and smelters outside China would probably number less than 100, there are over 500 in China. These small operations tend to be inefficient and poorly regulated.

While metal production facilities are frequently referred to as smelters, true smelting operations have not provided a significant proportion of metal for a number of years, and production is almost entirely by electro-refining. In the electro-refinery the concentrate is roasted and leached and the zinc is recovered by electrowinning. The sulphur dioxide released by roasting is converted to acid. which is an important by-product plants produce by-product acid, tend to be built for an indefinite life and generally draw on concentrate from several different mining operations. The acid is an important by-product provided it can be sold locally. These facilities tended to be built in industrialised areas.

Marketing
In common with the other major metals, zinc is traded on the London Metals Exchange or LME. The LME provides a guaranteed market for producers. The LME price forms the basis of almost all metal and concentrate pricing contracts, yet ironically very little metal changes hands at the LME price. Physical metal always trades at a premium to the quoted price and the premium will change from place to place, reflecting regional shortages and from time to time as the market swings from surplus to deficit. Generally speaking the premium is in the range US$50 to US$120 per tonne.

In order to sell to the LME, metal must meet a certain high standard of quality. Most metal achieves the LME highest quality, Special High Grade containing 99.95% zinc. Metal is produced as 25kg ingots and packaged as one tonne lots.

Uses
A little over half of zinc is used for galvanising, which is the application of a thin coating of zinc on steel. The zinc seals the steel so that corrosion cannot occur. Galvanised items are increasingly common and include car bodies, the outer shell of white goods, street furniture (lamp posts, crash barriers) and many other steel objects that are exposed to the elements.


White Goods


Galvanised car bodies

 

Zinc Oxide
About 9% of zinc is used in the production of zinc chemicals, of which zinc oxide is by far the most important.