Winter Park, Florida 02/02/2016 - Doe Run will lower mine production at its Missouri lead mining district for 2016 by 20,000 short tons of lead-contained in concentrate and lesser amounts of zinc and copper, it said.
This represents about 10 percent of the lead-contained output the company typically produces in a year, Jose Hansen, vice president of sales and marketing, said.
"We will work with our customers over the next several days to make necessary adjustments in our product delivery," he said.
“We have taken this action as a result of depressed metal prices and increased operational and regulatory costs. We will continue to explore opportunities to reduce costs and improve operational efficiencies so we can address the changing market," he added.
Doe Run owns and operates the world’s second-largest lead mining district in southeast Missouri.
This adds to the 72,000 tonnes and 24,000 tonnes of mined lead production lost from the Lisheen and Century mines mines respectively - those operations closed in the fourth quarter of last year. Combined with Glencore's cuts, 3.5 percent of 5.46 million tonnes of mined production will be lost.
Meanwhile, Korea zinc will lift its lead smelting capacity by 100,000 tonnes per year to 430,000 tonnes per year, which will require 210,000-260,000 tonnes of additional high-silver lead concentrates.
This has already tightened the concentrates market and has put downward pressure on spot treatment charges (TCs). Last week, TCs for high-silver concentrate dipped to $160-170 per tonne from $170-180.
Negotiations for 2016 material are just getting started - the miners are expected to ask for a drop of $30-40 in TCs and a return to silver refining charge of $1 per ounce, while the Chinese smelters want a $2 RC.
For 2015, BHP Billiton - now South32 - and Korea Zinc agreed a deal for Cannington high-silver concentrate for $192.50 per tonne, which was the lowest benchmark since 2007, with a silver RC at $1.50 per ounce.
(Editing by Mark Shaw)