With world market conditions for zinc production trending upwards, Teck Resources has re-opened a mine south of the border and sent the first shipment to Trail this week.
The restart of Pend Oreille zinc mine located near Metaline Falls, Wash. enables Teck to capitalize on global zinc supply constraints and makes a positive contribution to Teck's zinc production and operating profit, explained Catherine Adair from Teck Trail Operations.
“At the same time Trail operations benefit from synergies between the two operations, which includes reduced transportation requirements.”
The close proximity of the mine, which is about 86 km from Trail, reduces the company's transportation costs, said Adair, noting that Trimac Transportation Services is managing the hauls of approximately seven shipments per day from Pend Oreille to the city.
Since 1990 the trucking company has been hauling metal concentrate to the Waneta reload facility, including previous transportation loads from the Pend Oreille mine.
The added zine and lead concentrate, which is expected to bump the rate of production by 44,000 tonnes, will pass through the Nelway border, which operates from 8 a.m. until midnight.
While the impact of additional zinc concentrate to Trail operations is minimal, it has added 230 jobs in Pend Oreille county and flows about $20 million of investment to the communities in that area.
The mine was operated by Teck Resources for five years, but unfavourable market conditions had the company maintaining the site after the facility shut down in 2009.
“The restart of our Pend Oreille zinc mine was completed on time and under budget,” said Don Lindsay, Teck's president and chief executive officer in a Wednesday news release. “We are pleased to be operating again in Washington State and helping to support jobs and economic activity in the community, region and state.”
Although zinc profits were down $5 million in Teck's first quarter, the outlook for the ore was the most favourable of the base metals.
"The forecast from all analysts for zinc is very good unlike coal," explained Local 480's Vice President Gordon Menelaws in a previous interview. "The fact that they are re-opening Pend Oreille mine is excellent news for Trail due to its proximity to our operation."
All production from the Pend Oreille mine will be processed at the Trail metallurgical operations, as concentrate characteristics in the ore and lower transportation costs could provide approximately $15 million of annual benefits that cannot be obtained from other sources of concentrate.
Profits from coal were down $224 million in the first quarter after Australian coal mines increased market supplies and dropped coal prices 19 per cent, which is the lowest profit margin in 10 years.
Additionally, gross profits were down $33 million after copper prices dropped 11 per cent in the first quarter and were offset by the U.S. dollar strengthening against the Canadian dollar compared to one year ago.