Benign Banter & Price Predictions

Supply concerns have hit the refined zinc market in recent months, with prices reaching a decade high in August and continuing to trade above the $3,000-per-tonne level since then. As of December 11, LME zinc was changing hands at $3,092 that has now increased to $3,429 (16th Jan LME cash ask).

Glencore did turn back on production with the restart of Lady Loretta (~160kt/a at full production for the MT Isa project). Whilst doing that they have made another investment into the industry at the same time, a 10% strategic interest in the Moorsboro smelter.

In short even if more production comes on, Glencore, the worlds largest trading house is taking a position on the future of the market being positive.

We already know from the prospectus that this is a world class project with very high Zn/Pb (Ag) grades, with coarse crystalline sphalerite and galena (pretty much direct shipped). Depth may be a question (hopefully good results) but overall these deposits have excellent potential to develop long life mines. They are early movers in an underexplored and emerging mining province with a government now looking for cash from resource projects so safe to say they are committed to developing the mining industry through tax concessions, mining incentives and secure title.

Even if they only move 100t this year its going to be a pure cash printer.