The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
North of 60 Mining News - November 1, 2024
More than $1.5 billion worth of zinc was mined in Alaska during 2023, a figure that is expected to rise in 2024 with increasing prices and higher output from Red Dog.
Roughly four metric tons of zinc goes into the construction of every 10 MWh offshore wind turbine.
A truck of zinc concentrates being hauled to the Delong Mountain Transportation System Port for summertime delivery to global markets.
The Aktigiruq, Anarraaq, and Lik deposits on state land northwest of the mill have the potential to significantly extend the life of Red Dog Mine.
Jonathan Price
Rising demand and a three-year-long slide in supply are pushing up the price of zinc, which is good news for zinc-producing jurisdictions like Alaska but not so much for the buyers of this galvanizing metal widely used for renewable energy and transportation infrastructure, automobiles, and a wide array of other applications.
Potential supply shortfalls and the risks that come with that weighed on the U.S. Geological Survey's decision to add this abundant metal to the United States' critical mineral list in 2022.
While not as exotic as gallium, rare earths, or many of the other minerals that have been deemed critical to the U.S., zinc is essential for weather-proofing the light poles, guardrails, and 5G telecommunication towers on your commute to work, as well as protecting the renewable energy infrastructure feeding low-carbon electricity into power grids.
Jonathan Price
"Zinc plays an important role in enabling a low-carbon future and our people are focused every day on responsibly producing this critical mineral that the world needs," said Jonathan Price, president and CEO of Teck Resources Ltd., a company that produces globally significant quantities of zinc at its Red Dog Mine in Alaska.
According to the World Economic Forum, roughly 8,800 pounds of zinc goes into the construction of every 10 megawatt-hour offshore wind turbine, which generates enough electricity to power around 1,100 homes, and roughly 530,000 lb is needed to galvanize a 100MW solar park, which could power 110,000 homes at full capacity.
Zinc is also widely used in alloys important to the automotive and electronics industries; compounds used in rubber and paint; fertilizers for agriculture; and zinc-air batteries for renewable energy storage.
Global mines falling short of meeting global demand for three straight years is putting a strain on global zinc stockpiles.
The International Lead and Zinc Study Group recently forecast that mines will fall roughly 361.5 million lb short of meeting global zinc demand in 2024, which is pushing up the metal's price and criticality.
"For a critical metal that ranks as the fourth most produced metal in the world – this is a problem," Anthony Milewski penned in an article for the Oregon Group, an investment research firm focused on critical minerals, energy, geopolitics, and technology.
For Alaska and the zinc-producing mines found there, however, climbing prices translate to getting more value per pound of zinc, the single largest contributor to the $4.25 billion of mine products produced in the state last year.
Roughly four metric tons of zinc goes into the construction of every 10 MWh offshore wind turbine.
Due in large part to the high-grade deposits at Teck's Red Dog Mine, zinc contributed more than $1.5 billion to the value of metals, coal, and aggregate products mined in America's 49th State during 2023.
During 2023, Red Dog produced 539,800 metric tons (1.19 billion pounds) of zinc, which accounts for 4.5% of the 12 billion metric tons of all the zinc mined on Earth last year.
When you add in the 47,000 metric tons (103.6 million lb) produced as a byproduct at Hecla Mining Company's Greens Creek silver mine, more than 5% of the global zinc supply last year came from Alaska.
While global zinc supply is trending downward, the quantity of this critical metal produced in Alaska is expected to climb in 2024, thanks to a strong performance at Red Dog.
Through the first nine months of 2024, Red Dog produced 427,200 metric tons (941.8 million pounds) of zinc, which puts Teck's world-class zinc mine on Northwest Alaska Native land owned by NANA Corp. on pace to supply markets with around 569,300 metric tons (1.25 billion lb) of the critical metal this year.
A truck of zinc concentrates being hauled to the Delong Mountain Transportation System Port for summertime delivery to global markets.
During an Oct. 24 call to investors and analysts, Teck Resources Chief Commercial Officer Ian Anderson said the company is seeing "a chronic shortage and underinvestment" in zinc mines, and the supply side is being further challenged by unexpected disruptions due to weather and other events.
These events are expected to push zinc prices higher in the near term, which is good news for this Canadian miner and its Red Dog Mine.
"We are looking to zinc for a bright future in 2025," said Anderson.
Looking beyond 2025, however, Teck's zinc production is slated to trend downward due to diminishing reserves at Red Dog.
There are currently enough reserves at Red Dog to keep the Northwest Mine in operation until 2031, but zinc production is expected to dwindle alongside the reserves starting in 2026.
In guidance put out early this year, Teck forecast that Red Dog zinc production would drop to around 440,000 metric tons (970 million lb) in 2026, which is about 25% less than this year, and drop nearly another 15% to around 380,000 metric tons (838 million lb) in 2027.
Teck, however, is exploring deposits on nearby state of Alaska lands that could delay the sunset of the world's largest zinc-producing mine.
"There is regional geology that suggests there are other deposits as close as 10 miles away that could be as large as the existing deposits that we are operating right now," Michael Gonzales, manager of tailings and environment at Red Dog, said in a video describing the potential around the mine. "Because it is similar, because it is close by, it is a great opportunity."
The Aktigiruq, Anarraaq, and Lik deposits on state land northwest of the mill have the potential to significantly extend the life of Red Dog Mine.
This includes the Aktigiruq-Anarraaq Extension Project, which hosts large orebodies with zinc grades similar to what is currently being mined from the pits adjacent to the mill at Red Dog.
According to a resource calculated in 2017, Anarraaq hosts 19.4 million metric tons of inferred resource averaging 14.4% (2.7 million metric tons) zinc. At the time, Aktigiruq was an exploration target estimated to host another 10 million to 20 million metric tons of zinc in 80 to 150 million metric tons of material with grades similar to Anarraaq.
Upgrading a significant portion of the Aktigiruq-Anarraaq mineralization to reserves could mean a new era of mining that keeps Red Dog in operation to at least 2050 and potentially a couple of decades beyond.
In the wider Red Dog district, Teck is also exploring the Lik zinc project under a 50-50 partnership with Solitario Zinc Corp.
Lying about 11 miles northwest of the mill at Red Dog, Lik hosts 17.6 million metric tons of potentially open pit mineable indicated resource averaging 8.1% zinc, 2.7% lead, and 50.1 g/t silver; plus 2.8 million metric tons of inferred resource at 8.6% zinc, 2.7% lead, and 38.9 g/t silver.
While the grades are lower at Lik than other deposits in the Red Dog district, Lik is well above the average global zinc ore grade of around 5.8%. With an operating mill just a few miles away and the infrastructure in place to deliver zinc, lead, and silver into global markets, this project has the potential to keep the Red Dog district a globally significant supplier of zinc even deeper into the 21st century.
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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