Feeding the Lawn Hill giant

Posted April 8, 2014

The processing plant at MMG

MMG’s Lawn Hill processing plant in Queensland’s lower Gulf region has a long way to go before retiring.

The umbilical connection with the Century pit will be cut in 2016 as the proud parent faces redundancy after 20 years as a world’s best zinc producer.

Enter Dugald River

MMG Queensland operations general manager Mark Adams said there was a 45-million-tonne resource waiting to be mined over an estimated 20-year life span.

The processing plant, estimated to have a replacement value of about $1.2 billion, would be fully depreciated by 2017 - which was an added commercial imperative, Mr Adams said.

While still in its infancy, the Dugald River project, about 65km north-west of Cloncurry, is well established - taking water from the Lake Julius connection to Ernest Henry mine and power from the Mount Isa-to-Ernest Henry line.

Getting it right

It is no secret that Dugald River presents challenges for mine planners.

Several companies, including Rio Tinto and Pasminco, have owned the lease and failed to realise its potential.

MMG upgraded its estimates for Dugald River in its minerals resources and ore reserves statement 2013, which was presented to the Hong Kong Stock Exchange.

It said; “Dugald River zinc mineral resources have increased as a result of updated mineral deposit interpretation and modelling supported by definition drilling and underground geological mapping.”

Zinc was up 1 million tonnes to 7.6 million tonnes, and silver was up 2 million oz to 64 million oz.

MMG maintains new geotechnical approaches will unlock the riches and says the ore body strikes 10,000m underground.

“Dugald River is one of the five best (zinc) ore bodies left in the world today,” Mr Adams said. “The ore body is more complex than expected but that’s underground mining.”

What’s next?

Dugald River is not the only hand MMG will play to keep its Gulf facilities turning over.

The company has split the lease up into 30 exploration zones in an effort to identify smaller, even higher-grade deposits.

MMG was confident the geology of the area, where material that was easily mobilised was forced into fault structures, would reveal reserves of dominantly lead ore, Mr Adams said. Processing tailings dam fines was another options being investigated by mine managers, he said.

The plant currently extracts about 75 per cent of the zinc metal and 55 per cent of lead, leaving a vast resource in the tailings dam.

That’s estimated to be about 2 million tonnes of zinc alone. “We can now show fairly conclusively (that) technically we can extract it. Previously that was not an issue, we couldn’t extract it. Now the question is can we run a commercial process?” Mr Adams said.

Processing tailings dam material also removed a major environmental liability which added to the business case, he said.

The potential for phosphate production presents yet another option for planners.

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