Arab Today, arab today tumbling zinc prices hit corner of rural ireland
Last Updated : GMT 15:59:42
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Tumbling zinc prices hit corner of rural Ireland

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Arab Today, arab today Tumbling zinc prices hit corner of rural Ireland

A handout photo shows a worker operating a scaling machine
Dublin - AFP

Ireland is feeling the strain as Europe's largest producer of zinc with global prices for the metal plummeting due to an economic slowdown in China and surplus supply on world markets.

The country's second largest mine is shutting down with the loss of 370 jobs because the zinc is running out and Indian owners Vedanta Resources Group have no plans for further production.

Set in a region with few other employment opportunities in rural southern Ireland, Lisheen Mine has been in operation since 1999.

"Mining operations will cease at the end of November, and the milling operations will cease during December," Vedanta said in a statement to AFP.

"There was a lot of expectation we'd get another few years," Tim Bergin, a worker in the mine for the past 15 years, told AFP.

"Up until last year even, there was a hope they would drill out, find more and they might extend it," he said.

"But it's closing. That's it."

Its closure will leave Tara, Europe's largest zinc mine, as the only active zinc extraction point in Ireland, accounting for 150,000- 200,000 tonnes a year.

Tara, owned by Swedish company Boliden, is expected to continue production until 2019.

Analyst Caroline Bain at Capital Economics, a research consultancy, said: "Given the current price environment I can't envisage a new project."

Zinc prices have fallen by almost 30 percent this year to six-year lows and earlier this month dropped temporarily below the $1,500 per tonne threshold.

"Ireland was the 10th producer of zinc in the world, as well as the largest in Europe, with 300,000 metric tonnes of zinc mined in 2014," said Justas Gedvilas, industry analyst at Euromonitor International.

The country was responsible for 2.2 percent of global output and 28 percent of European output in 2014.

The closure of Lisheen will almost halve Ireland's zinc output and reduce global supply by 1.2 percent.

"Yet the closures should not have a huge effect on the overall Irish economy as mining contributes only 0.02 percent of Irish GDP (gross domestic product)," Gedvilas said.

- More reserves to explore -

Zinc is a metal traditionally used to galvanise steel to protect it from corrosion but is also used in construction, electronics and to make batteries.

Analysts said a reduction in supply could push up the global price of zinc somewhat, but mainly due to the depletion of larger sources such as Century in Australia, which is also due to close this year.

"Other mines are closing elsewhere so it is playing a part in the general picture of a tightening supply outlook," said Bain.

The Lisheen plant, which is surrounded by bog and farm land, stepped up its wind-down in the last eight months, with the workforce dwindling as the final day of production draws closer.

Staff member Pat Hynes, 53, predicted he will have to commute to find work once he loses his job, even suggesting he may have to go to Britain.

"There aren't many mining jobs in Ireland. There's certainly nothing around here."

A number of companies, including Glencore and Vedanta, are exploring other prospecting licence areas for lead and zinc in Ireland even though current prices are hardly encouraging.

"The reserves of zinc ore in Ireland are yet far from explored," said Gedvilas, adding that the Irish midlands were "one of the most important ore fields of zinc and lead of the world".

 

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