Lundin Mining Corp. attributed the decision to the escalating COVID-19 pandemic. The company announced that it has temporarily suspended construction and commissioning activities at the Zinc Expansion Project (ZEP) at its Neves-Corvo copper-zinc mine in Portugal. Previously, the zinc expansion project was on track for a phased start-up beginning in the second quarter of 2020, with $155 million earmarked by Lundin to spend in 2020 to complete the project.
Lundin is a diversified Canadian base metals mining company with operations in Chile, the United States, Portugal, Sweden and Finland, primarily producing copper, nickel and zinc. Lundin shares eased 12.2% or 71 cents to $5.11 on volume of 1.87 million. The shares are currently trading in a 52-week range of $8.08 and $4.91.
Despite the softer fourth quarter operational results, total 2019 consolidated copper, zinc and nickel production of 235,000 tonnes, 152,000 tonnes and 13,500 tonnes respectively all met or slightly exceeded the most recent annual guidance ranges of 227,000-245,000 tonnes, 149,000-157,000 tonnes and 12,000-15,000 tonnes respectively.
Lundin has recently said it anticipates strong growth in its metal production. The company said copper production is expected to rise by over 20% in 2020 compare to 2019, with full year contributions from the Chapada copper-gold mine and Candelaria mining complex. It said zinc production is forecast to increase by over 15% in the same period while nickel production will jump by over 25%.
Neves-Corvo is mainly a copper and zinc mine, producing copper, zinc and lead concentrates. The operation is owned and operated by Lundin Mining’s Portuguese subsidiary Sominor. Neves-Corvo mines underground from five major orebodies. The processing facility consists of two plants. The copper plant processes copper ores and has a capacity of 2.6 million tonnes annually. The zinc plant, which can process zinc or copper ores, has a capacity of approximately 1.1 million tonnes per annum. The capacity is currently being expanded to 2.5 million tonnes.
ZEP was approved in 2017. Its aim was to increase the zinc mining and processing capacity at Neves-Corvo to approximately 2.5 million tonnes annually, generating an average of 150,000 tonnes annually of zinc concentrate over 10 years.
New mine infrastructure for the ZEP includes a new crusher station, a conveyor system connecting this to the 700 shaft hoisting facilities, an upgrade to the main hoisting shaft, together with extensions to the mines’ ventilation, pumping and electrical distribution systems. Much of the zinc ore for the ZEP will be mined in deep areas of the Lombador orebody using primarily bench and fill mining methods, with limited amounts of drift and fill. In 2020, the Neves-Corvo is expected to produce between 38,000-43,000 tonnes of copper and 95,000 to 105,000 tonnes of zinc.