Zinc maker Terramin announced on Friday its Angas zinc mine is going into care and maintenance, with 115 jobs being slashed.
Escalating costs and slumping commodity prices has seen the Adelaide-based company join a host of others cutting back on projects.
According to Terramin, operations on the mine will stop on September 30 if exploration at depth and near mine commences, The Australian reported.
“As foreshadowed in previous announcements, the Angas zinc mine will reach the end of its economic life at current metal prices at the end of September,” the company’s ASX statement said.
“Terramin recently completed a deep exploration program under the main ore body, which did not encounter significant mineralisation that could be mined commercially at current commodity prices. The company continues to identify, review and develop these opportunities.”
The company invested $71 million to open the mine near Strathalbyn in 2008 but five years later, CEO Martin Janes said top quality zinc was scarce.
“We certainly have lost a little bit of time off the mine and I’d say that economically the mine has not been a huge success story,” he said.
He added some employees would take care of the site after September and continue exploring for deposits, the ABC reported.But he added the price of zinc would need to increase considerably for it to be sustainable.Terramin said it was exploring alternative uses for the mine site, the plans and related equipment.
“The availability of mining infrastructure and treatment plant place the company in a good position,” Terramin said.
Contractor Downer Mining cut 100 jobs last week from Fortescue Metals Groups' Christmas Creek iron ore mine in the Pilbara.
That was followed by uranium exploration company Deep Yellow cutting jobs and decreasing salaries by 5 per cent, in a bid to decrease overhead costs as the uranium sector slumps.
Brazilian mining giant Vale said it is selling a Queensland coal project after job losses and asset writedowns at its Australian projects.
The revelation of the closure of Angas comes after Chinese-managed MMG said it was going forward with its $US1.5 billion ($1.65bn) zinc, lead and silver deposit in Queensland. A debt facility from China Development Bank and Bank of China (Sydney) will help it.
MMG forecasts a production reduction of 1.5 million tonnes a year of zinc metal from the 11-12mtpa global market in the next four to five years.
The company’s CEO Andrew Michelmore said its Queensland Dugald River project will fill the gap created by mine closures, as investment in exploration and development of new supplies dip.
The mining union wants to meet company officials this week to talk about workers’ entitlements.Queensland coalfields recently saw 1000 jobs slashed from various companies in one week.
CFMEU mining and energy vice president Steve Pierce said the companies had wasted billions of dollars with workers facing the consequences.