By Shane Lasley
Mining News
Strong Red Dog zinc production continues
Northwest Alaska mine posts another quarter of rising output North of 60 Mining News – October 28, 2022
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Last updated 10/27/2022 at 3:40pm
Alaska Industrial Development and Export Authority
The first shipments of zinc and lead concentrates from the Delong Mountain Transportation System port began in early July, and the final shipments are expected to be sent out by the end of this month.
Teck Resources Ltd. Oct. 27 reported another quarter of rising zinc production and revenues from its Red Dog Mine in Northwest Alaska.
During the third quarter of this year, Red Dog produced 157,800 metric tons (347.9 million pounds) of zinc, nearly 10% higher than the 143,800 metric tons (317 million lb) produced during the previous quarter and a 34% jump over the 118,000 metric tons (309.3 million lb) produced during the same period of 2021.
Third quarter lead production at Red Dog was 19,000 metric tons (41.9 million lb), down nearly 10% from the 21,000 metric tons (46.3 million lb) produced during the second quarter and a roughly 22% drop from the 24,400 metric tons (53.8 million lb) produced during the third quarter of 2021.
Teck attributes the increased zinc and decreased lead compared to the third quarter of 2021 to expected shifts in ore grades at Red Dog. The ore fed into the mill at Red Dog during the third quarter of this year averaged 15.8% zinc and 3.4% lead, compared to 14.3% zinc and 4.5% lead during Q3 2021.
The strong zinc output at Red Dog comes during a quarter that the price for a pound of this galvanizing metal averaged US$1.48, a drop of 16% from the US$1.78/lb average during the second quarter of this year and a 9% increase over the US$1.36/lb during Q3 2021.
With concerns over inflation, high energy prices, and recession causing buyers to slow zinc metal purchases, the price for this galvanizing metal is sitting at around US$1.35/lb. Global inventories of this metal vital to a large swath of the global economy, however, continue to be drawn down due to a lack of growth in mine production.
Alaska Industrial Development and Export Authority
A truck hauls concentrates along the 52-mile Delong Mountain Transportation System road that links the Red Dog zinc-lead-silver mine to a port on the Northwest Alaska coast.
London Metals Exchange warehouse stocks have fallen to around 45,000 metric tons, the lowest level in at least five years. Total global visible zinc stocks, which includes zinc held in Chinese bonded warehouses, have fallen to 2.6 days of global consumption, the lowest since 1990.
As a result of strong zinc production and prices, Red Dog generated C$914 million (US$677 million) in revenues for Teck during the third quarter. This is more than double the C$99 million (US$77 million) of revenue generated during Q3 2021.
Likewise, Teck's profit from the Red Dog Mine was C$336 million (US$249 million) during the third quarter of this year, which is 19% higher than the C$272 million (US$202 million) during Q3 2021.
Red Dog has generated C$1.43 billion (US$1.06 billion) in revenue and C$736 million (US$535 million) in profit for Teck during the first nine months of 2022.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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