Global zinc production to rebound – report

Elevated zinc prices relative to historical levels will encourage investment in new projects, expansions and restarts as the economics of the projects maintain their attractiveness, Fitch asserts. The analyst also sees scope for some idled capacity to be restarted. Fitch forecasts global zinc mine production to grow at an annual average rate of 1.8% over 2021-2029, compared with 0.2% over the previous decade.

China will remain largest global producer

Fitch expects China’s zinc mine production will stagnate over the coming years due to declining ore grades and increasingly stringent environmental regulations.

The conservation of minerals and increasing consolidation of mining industries outlined in China’s 13th Five-Year Plan will weigh on zinc output, and the strong support for state- owned enterprises (SOEs) in the plan will ensure that China’s zinc industry remains dominated by SOEs, with increasing consolidation of smaller miners, Fitch says. Zijin Mining will remain a dominant producer in China’s zinc sector with ownership of China’s second largest zinc mine Wulagen and its 95% ownership in the Miaogou-Sanguikou operations.

Fitch forecasts the country’s zinc production to edge higher, from 3.85mnt in 2021 to 3.87mnt by 2029. Despite this muted growth rate, China will remain the largest global producer of zinc by a wide margin, and Fitch forecasts China’s share of global production to slide from 29% in 2021 to 26% by 2029.


Fitch predicts Peru will remain a top zinc concentrate producer over the coming years. The country is home to approximately 57 mining firms according to the Ministry of Energy & Mines, which consist of both international firms such as Teck Resources and Glencore and as well as domestic miners.

Despite the large number of players, Peru’s zinc sector is dominated by the Antamina operation and Nexa Resources’ operations of Cerro Lindo and El Porvenir. Antamina produced 303kt in 2019, marking a 25.8% y-o-y contraction from 409kt in 2018. In 2019, Cerro Lindo and El Porvenir respectively produced 250kt and 97kt of zinc.

Operations at Antamina were suspended from mid-April to late May 2020 due to the covid-19 pandemic, but nonetheless, Glencore reported 4.0% y-o-y growth in zinc output at the site during H120.

Elevated zinc prices will allow firms to move forward with projects within the pipeline, supporting stable growth. Fitch points out that as of November 2020, Tinka Resources is continuing to develop the Ayawilca asset with it recently beginning a resource expansion drill program which it will continue into 2021. The firm’s current timeline aims to complete the feasibility study by 2021-2022 then begin operations by 2023, producing approximately 140kt of zinc concentrate in its first year.

Fitch also expects Nexa Resources to pick back up the development of its Shalipayco project, which in Q320, was in the pre-feasibility study phase and on hold due to its changed capex strategy in response to covid-19. Peru has the third highest number of new zinc projects in the pipeline at 16, according to Fitch’s Global Mines Database.

Australia trajectory

Following 2019’s year of robust growth, Fitch expects Australia to maintain its positive trajectory over the coming decade. Over 2019, the ramp up of MMG’s Dugald River mine and the restart of Glencore’s Lady Lorreta mine at Mount Isa led the increase in Australia’s zinc mine output by an estimated 14% y-o-y.

Fitch expects New Centruy Resources to be a significant driver of growth as the firm ramps up its Century mine asset. The mine has successfully refurbished its 12mtpa zinc flotation plant and restarted operations. In turn zinc output reached 33.6kt in Q320, marking a 28.2% y-o-y increase. Fitch estimates the operation is on pace to produce approximately 120-132kt per annum.

Fitch forecasts the country’s zinc production to increase from 1.4mnt in 2021 to 1.6mnt by 2029, averaging 2.4% growth y- o-y, on the back of elevated zinc prices and the solid project pipeline. Junior miners will continue to advance zinc projects in Australia, given the positive outlook for zinc prices over the coming years. Australia currently holds a combined 27 zinc-related new projects, expansions and restarts in the analyst’s Global Mines Database.

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