London-listed ZincOx Resources Plc will soon announce two new recycling projects and is currently looking at another zinc oxide deposit, the company's managing director, Andrew Woollett, said in an interview.
ZincOx uses the refining technology the management developed at South African miner Anglo American's 150,000 tonne per year Skorpion zinc operation in Namibia.
"ZincOx was set up to repeat the success story of Skorpion... and look all around the would just for these unwanted zinc oxide deposits, the unloved ugly ducklings of the zinc world," Woollett said on Tuesday. By using the new technology ZincOx wants to develop zinc oxide deposits rather than the more common sulphide deposits.
Traditional smelters use sulphide concentrate as feed material, amounting to around 60 percent of production cost.
In the next two months a new zinc oxide deposit will be announced, Woollett said.
In Yemen, ZincOx holds 60 percent in Jabali. Anglo and Yemeni firm Ansan Wifks each hold 20 percent.
The 56,000-tonne-per-year (tpy) zinc oxide project was supposed to come onstream in the second half of 2007, but is delayed to mid-2008, due to slower-than-expected project financing, Woollet said. The problems derive from its fairly new technology and the fact that Yemen is a politically sensitive country.
One of the attractions of selling zinc oxide rather than zinc metal is its value, Woollett said. The price of zinc oxide is based on the London Metal Exchange (LME) value of the zinc contained plus a premium.
As the zinc price may fall in the medium term the reduction in price to some extent will be offset by the penetration of markets for products having a higher premium.
Some 50 percent of zinc oxide goes into tyres and rubber. The rest of the one-million-tpy market is used in chemicals, fertilisers and ceramics. Within two months, ZincOx will announce two additional recycling projects, where zinc is produced from steel waste.
ZincOx already has two recycling projects, Big River Zinc in the United States and Aliaga in Turkey, which uses EAFD (Electric Arc Furnace Dust) as a raw material.