Picture: ISTOCK
Picture: ISTOCK

Melbourne — Australia’s New Century Resources is on track to turn a giant tailings dam into the world’s fifth-biggest source of zinc as it defies doubters to make its first shipment in August, said Patrick Walta, the mineral processor’s MD.

New Century is processing the tailings, or the residue left over from previously mined ore, at the Century mine, previously the world’s largest zinc mine. The firm expects the project will prove it is possible to rehabilitate mine sites for profit in an industry where remediation has been seen only as a cost.

"We want to be the Australian premier mine rehabilitation company," said Walta, who first started looking at economic mine rehabilitation with his firm Raging Bull a decade ago.

"For us, Century is great. It puts us on the map," he said in an interview on Tuesday.

New Century shot into view in 2017 when its former incarnation, Century Bull, secured the tailings rights to the mine in the western part of Australia’s Queensland state that had depleted its resources and closed. It acquired the rights from MMG, the Australian unit of China Minmetals.

Walta and Raging Bull, had been in talks with MMG for years on ways to recover more zinc from the still mineral-rich tailings and rehabilitate the mine, which had a hefty A$193m ($142.2m) closure provision.

New Century’s plan was to slash costs by reprocessing the tailings using MMG’s existing plant, environmental permits, land use agreements and pipeline to a nearby port.

"We think by the end of next year it becomes a derisked project, a top five zinc producer in the lowest cost quartile. And there’s plenty of opportunity to expand," Walta said.

While the miner has lined up sales for most of its zinc output with four traders and a smelter, not everyone is convinced of the plan.

"I don’t want to talk about another company, but they’re all taking on an old pit. Let’s see what eventually happens," said Ivan Glasenberg, CEO of mining giant Glencore, which runs a neighbouring mine, on an earnings call earlier in 2018.

According to a company presentation, New Century aims to produce 4,000 tonnes of zinc in the third quarter as it starts up, and 30,000 tonnes in the fourth quarter before reaching name plate capacity of 260,000 tonnes by the end of 2019.

It is also assessing the potential to bring forward to 2019 development of three other deposits within a few kilometres of Century’s infrastructure with the view to extending the mine’s life to 10 years from six.

"Getting first tonnes is one part of the challenge. They now have to ramp up to nameplate capacity, sustain it and demonstrate that it is operating at the cost profile they expect," said analyst Lachlan Shaw at UBS in Melbourne.