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Ivernia mine closing could boost lead

Discussion in 'Uncategorized Threads' started by Joe Potosky, Apr 4, 2007.

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  1. Joe Potosky

    Joe Potosky Well-Known Member

    Jan 29, 1998
    Ivernia mine closing could boost lead

    Traders expect metal will test new highs after shipments halted at Australian port

    ANDY HOFFMAN - Globe and Mail


    Lead, a toxic metal used to make car batteries and bullets, became the latest commodity to take its turn in the spotlight yesterday after a Canadian company shut down a mine that has been linked to a rash of bird deaths in Australia.

    Toronto's Ivernia Inc. temporarily halted production at its Magellan lead mine in Western Australia amid a government probe into lead contamination in and around the port of Esperance, where the company's lead concentrate is shipped to customers in Asia.

    The mine closing prompted traders to expect that the price of lead may test new all-time highs above $2,000 (U.S.) a tonne on the London Metal Exchange. Lead has soared 30 per cent this year on supply concerns and rising demand from China.

    Esperance officials halted all lead shipments from the port on March 12 after testing by the Western Australian Department of Environment and Conservation found that lead poisoning may have caused the death of an estimated 4,000 birds in December and January.

    "To say that the turn of events over the last three weeks has been disappointing would be an understatement," Alan De'ath, Ivernia's president and chief executive officer, said on a conference call.

    Ivernia shares sank 16.5 per cent on the Toronto Stock Exchange, losing 22 cents (Canadian) to close at $1.11. At one point, shares in the company, believed to be the only publicly traded pure-play lead miner, touched a low of 98 cents. Ivernia has a market capitalization of about $150-million.

    Ivernia said it has laid off three-quarters of the mine's work force, keeping 30 workers on for maintenance and upkeep. It expects Magellan, which is said to contain roughly 3 per cent of the world's lead supply, will restart production in three or four months. The company said it will take that long to receive regulatory approvals to ship its lead concentrate under what it calls "alternate procedures."

    Testing on 411 human blood samples taken from those who live and work in the port town of Esperance has found seven cases of lead levels above normal. The state government's health department said the six adults and one child who were found with lead levels above the recommended level will not require treatment.

    It is believed that lead dust was released as workers at the state-owned port handled the lead concentrate. Ivernia's concentrate is the only lead that is shipped from the port.

    "The reviews in Esperance to determine how lead dust got into the environment are ongoing," Mr. De'ath said.

    According to the Department of Health, 86 rainwater tanks used by area residents to collect drinking water have been found to contain lead levels that exceed recommended levels.

    The price of lead climbed $40 (U.S.) to $1,960 a tonne on the London Metal Exchange, a 2-per-cent gain. A strike at a lead mine in Peru added to supply worries.

    The Magellan operation, which began producing in late 2005 and is located about 900 kilometres northeast of Perth, produced 62,300 tonnes of lead last year.

    The company hopes to increase production to 100,000 tonnes, a level that would place Magellan among the world's top five producing lead mines.

    The temporary shutdown is likely to exacerbate a shortage of lead concentrate, which is processed into metal at smelting facilities. Lead demand outstripped production by 88,000 tonnes last year, according the British-based World Bureau of Metal Statistics.
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