MMG seeks up to $1.2 billion for new zinc mine
INVESTMENT in new Australian mines has not entirely dried up, with a Chinese-dominated company confirming overnight it will seek to raise almost $1.2 billion to build a new zinc, lead and silver mine.
Located in north-western Queensland, the Dugald River mine is set to be built by MMG: a Chinese dominated company that is listed in Hong Kong and has an Australian office in Melbourne. The MMG board, which includes the company’s Australian chief executive, Andrew Michelmore, has approved the mine subject to raising the necessary funds.
The approval comes at the end of a tough year for the Australian resources scene, which has had numerous big project proposals deferred on the back of sliding commodity prices and increasing shareholder demands for a greater share of profits through dividends.
Mr Michelmore said Dugald River would create about 600 jobs during construction and employ about 500 people once operation gets under way.
The mine is planned to help replace MMG’s nearby Century mine, which is expected to exhaust its zinc reserves within four years.
‘‘This will be a significant investment for MMG and one which demonstrates our confidence in the long-term outlook for zinc,’’ he said.
‘‘Zinc production from Dugald River will contribute to meeting the expected increase in demand resulting from the continuing industrialisation of the developing world, in a commodity where mine closures and contractions are expected in the short-term.’’
MMG, which is controlled by major shareholder China Minmetals Corporation, has struggled to raise its profile in Australia since buying several assets off OZ Minerals in 2009.
The company has undertaken a massive advertising campaign over recent months, splashing its brand across airports and media in a bid to boost its profile.
Mr Michelmore told Business Day earlier this month that the advertising blitz was designed to remove confusion around the company’s brand, and was not a precursor to an Australian listing.
While still a prospect for the future, Mr Michelmore said the notion of a listing on the ASX was ‘‘on the backburner’’ for now.