SYDNEY—Swiss-based miner Xstrata will consider its options
after an Australian court upheld an appeal by some of the country’s indigenous
inhabitants to halt an expansion of its McArthur River zinc mine, the company
said on Wednesday.
Aborigines from Australia’s Northern Territory had appealed
against the local government’s approval of Xstrata’s plan to divert the McArthur
River to allow it to replace a depleted underground mine with an open pit mine.
Indigenous groups and environmentalists have expressed
concern that during the rainy season in the Northern Territory, there would be a
risk that potentially contaminated seepage from mining and milling will reach
the 300-kilometre (185 mile) long McArthur River. Xstrata disputes the claims.
Xstrata has previously warned that failure to let the
expansion proceed would spell the end of the operation.
Xstrata has already cut ore production at the mine by 20
percent because of low metals prices, resulting in the loss of 68,000 tons of
concentrate, containing 31,700 tons of zinc metal and 7,200 tons of lead.
The zinc price on the London Metal Exchange is down 55
percent this year, while lead is off 60 percent.
Xstrata said its McArthur River Mining subsidiary would
consider the judgment over the coming days before making further comment.
The mine opened in 1995 as an underground operation, yielding
320,000 tons annually of lead and zinc in bulk concentrate, or ground ore, form.
Its output is sold mostly to Europe and Asia, where it is smelted.
The underground veins have been mostly mined out but the site still contains
one of the world’s largest deposits of zinc and lead. Xstrata has said that by
converting to open pit it can operate another 25 years at the same level of
production.
