Sanctions delay to Russian zinc mine causes supply miscalculation, sources say
Ozernoye says will produce volumes "comparable to the previously announced targets"
Goal is to reach full capacity in 2025
Sources say Ozernoye has yet to produce any zinc concentrate
Uncertainty has major implications in a market short of supply
By Julian Luk
LONDON, Oct 25 (Reuters) - Western sanctions on Russia's zinc miner Ozernoye have left it struggling to replace equipment needed to ramp up output, three sources with knowledge of the matter said, meaning mined zinc supply forecasts for 2025 are likely to be too high.
Without Ozernoye's substantial contribution to global mined zinc supply next year, a shortage of zinc concentrate - a raw material to make zinc metal, used to galvanise steel, is likely to persist. Concern over tight supplies is one of the drivers that has pushed zinc prices to a 20-month high. CMZN3
Asked about the possible delay, Ozernoye told Reuters it plans next year to produce concentrate "in volume comparable to the previously announced targets".
Ozernoye officially launched production in September, saying that it would reach full capacity of about 320,000 metric tons of zinc in concentrate in 2025.
That represents 2.5% of next year's global mined zinc supply estimated at 12.86 million tons, industry group the International Lead & Zinc Study Group (ILZSG) said.
The ILZSG included the ramp-up of Ozernoye in its forecasts of robust growth of 8.9% in new mining zinc supply outside China in 2025.
The sources, who asked not to be named because they were not authorised to speak publicly, said Ozernoye had yet to produce any material as it could not find an adequate replacement for the components that process rocks into powder-form concentrate.
Those parts were damaged by a fire in November 2023.
Ozernoye did not give any production targets when approached by smelters and traders interested in buying their concentrates next year, the sources said.
The components Ozernoye needs were developed and are made by commodity trader Glencore's GLEN.L subsidiary Glencore Technology. Glencore taps an Australian zinc-lead deposit with a similar mineral composition to that of Ozernoye.
Glencore can no longer sell the concentrator parts to Ozernoye, which the U.S. government placed under sanctions shortly after the fire.
Glencore declined to comment. The Swiss trader-miner said only it would "fully comply with all sanctions applicable to our business activities".
Ozernoye is working with local company TEM Partner to try to replicate Glencore's system, one source said. Production may start in November, the same source said.
The company statement said its equipment was made in Russia by its "in-house design bureau".
It said it expected to achieve "project capacity within a year from the start of commissioning," without specifying when that was.
"The part of the flotation equipment, which has already been commissioned, is behaving stably and the first batches of zinc concentrates have been received," it said.
The uncertainty over Ozernoye's output adds to the impact of other disruption, including Century's force majeure and a slower-than-expected ramp-up at Ivanhoe's IVN.TO Kipushi project in Democratic Republic of Congo (DRC).
Reflecting the difficulty of sourcing concentrate, zinc treatment charges (TC), the fees a smelter earns for converting concentrate into refined metal and a gauge of concentrates' availability, dropped to minus $40 a ton end of September, according to pricing agency SMM. SMM-ZNCONC-IMP
The lower TC pushed some zinc smelters into losses and they had to cut production.
Reporting by Julian Luk; editing by Pratima Desai and Barbara Lewis
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إخلاء المسؤولية: تتيح كيانات XM Group خدمة تنفيذية فقط والدخول إلى منصة تداولنا عبر الإنترنت، مما يسمح للشخص بمشاهدة و/أو استخدام المحتوى المتاح على موقع الويب أو عن طريقه، وهذا المحتوى لا يراد به التغيير أو التوسع عن ذلك. يخضع هذا الدخول والاستخدام دائماً لما يلي: (1) الشروط والأحكام؛ (2) تحذيرات المخاطر؛ (3) إخلاء المسؤولية الكامل. لذلك يُقدم هذا المحتوى على أنه ليس أكثر من معلومات عامة. تحديداً، يرجى الانتباه إلى أن المحتوى المتاح على منصة تداولنا عبر الإنترنت ليس طلباً أو عرضاً لدخول أي معاملات في الأسواق المالية. التداول في أي سوق مالي به مخاطرة عالية برأس مالك.
جميع المواد المنشورة على منصة تداولنا مخصصة للأغراض التعليمية/المعلوماتية فقط ولا تحتوي - ولا ينبغي اعتبار أنها تحتوي - على نصائح أو توصيات مالية أو ضريبية أو تجارية، أو سجلاً لأسعار تداولنا، أو عرضاً أو طلباً لأي معاملة في أي صكوك مالية أو عروض ترويجية مالية لا داعي لها.
أي محتوى تابع للغير بالإضافة إلى المحتوى الذي أعدته XM، مثل الآراء، والأخبار، والأبحاث، والتحليلات والأسعار وغيرها من المعلومات أو روابط مواقع تابعة للغير وواردة في هذا الموقع تُقدم لك "كما هي"، كتعليق عام على السوق ولا تعتبر نصيحة استثمارية. يجب ألا يُفسر أي محتوى على أنه بحث استثماري، وأن تلاحظ وتقبل أن المحتوى غير مُعدٍ وفقاً للمتطلبات القانونية المصممة لتعزيز استقلالية البحث الاستثماري، وبالتالي، فهو بمثابة تواصل تسويقي بموجب القوانين واللوائح ذات الصلة. فضلاً تأكد من أنك قد قرأت وفهمت الإخطار بالبحوث الاستثمارية غير المستقلة والتحذير من مخاطر المعلومات السابقة، والذي يمكنك الاطلاع عليه هنا.
