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The official site opening yesterday was attended by MMG CEO Jerry Jiao and chairman Guo Wenqing, as well as other stakeholders.
The project was originally meant to come online in the first half of next year, while capital costs were recently downgraded from an earlier estimate of $600-620 million.
Jiao congratulated the MMG team for bringing the project on under budget and ahead of schedule, as well as thanking the Queensland government, local communities, major shareholder China Minmetals Corporation, and financier China Development Bank.
“The Dugald River deposit was originally discovered in 1870s,” Jiao said.
“I’m very proud that MMG has finally brought this challenging project to production.
“By taking the time to understand the characteristics of this complex deposit, we have delivered the right plan and invested at the right time.
“We remain positive about the long-term fundamentals for zinc and Dugald River has come into production at a time of tightening global supply and rising prices.”
Dugald River will process around 1.7 million tonnes per annum of ore to initially produce 170,000 tonnes of zinc in concentrate, plus by-products.
When fully operational, the Dugald River mine will be a top 10 global zinc producer.
Zinc prices recently hit 10-year highs, but Morgan Stanley noted that participants of last week’s LME Week in London were cautious on outlook.
“We see downside risk as supply begins to respond through 2018,” it said.
Morgan Stanley is forecasting an average price of $1.23 per pound, against the current price of $1.46/lb.
Dugald River’s C1 cash costs are expected to be 68-78c/lb.
