Madrid 10/05/2016 - The supply of zinc-bearing raw materials from Peru will fall by around 153,000 tonnes this year compared with 2015, Paolo Cabrejos, the commercial manager of Volcan Cia Minera in Peru, said.
The decrease comes primarily from three mines - there will be reductions of 78,000 tonnes from Antamina, 85,000 tonnes from Iscaycruz and 15,000 tonnes from Pallca. But there will be an increase of 25,000 tonnes from Milpo in 2016.
In 2015, Peruvian mines raised output by 10 percent or 93,000 tonnes, comprising 32,000 tonnes from Antamina and 49,000 tonnes from Brocal.
Peruvian production fell 5.74 percent in the first quarter of 2016 due to the lower performance of some polymetallic mines. But domestic lead output climbed 1.65 percent due to increased supply from Antamina, Milpo and Volcan.
Miners worldwide have been focusing on cutting costs while prices are low, Cabrejos added at the MB Zinc conference here on Tuesday.
"They've taken different approaches such as optimising the contractor service, improving energy savings, prioritising operations as well as operating efficiencies and staff reductions," he said.
"It is more expensive to cut production and bring it back than keeping production and losing some money," he added.
Global zinc mine capacity had fallen around 1.138 million tonnes to 13.218 million tonnes at the end of 2015 via closures such as of the Century and Lisheen mines as well as production cuts from Glencore.
"We perceive the Glencore cuts as 344,000 tonnes - the 500,000 tonnes were based on increased production before the cut announcement," Cabrejos said.
ZINC TRADE FLOWS IN/OUT OF PERU
Of total Peruvian zinc mine production last year, around 77 percent or 1.091 million tonnes was exported, with China the largest importer, accounting for 35.5 percent of that total, Cabrejos said.
Around 71.8 percent of Peruvian supply goes to traders while the other 28.2 percent goes to smelters, he added.
"The main hubs are located in the Callao port. You have Glencore, Trafigura and Louis Dreyfus who have built warehouses there," he said.
(Edited by Mark Shaw)