China's MMG to decide on new zinc development in Q3

MELBOURNE, April 16 (Reuters) - China's MMG Ltd plans to decide by September how it plans to develop its Dugald River zinc project, key to replacing output from its Century mine, which is closing this year. Development of Dugald River, one of the world's largest undeveloped zinc lodes, was put on hold in 2013 when the company found the ore body was more complicated than expected and began new studies on how to develop it profitably. MMG, the Hong Kong-listed, Melbourne-based arm of China's state-owned Minmetals Corp, said on Thursday the revised development plan was likely to include lower annual output over a longer mine life. The original A$1.49 billion ($1.15 billion) project approved in 2012 had envisioned producing 200,000-220,000 tonnes of zinc in concentrate a year, with a mine life of more than 20 years, starting in late 2015. "We are continuing to review all available options with our objective of maximising long-term shareholder value. We expect to make a decision regarding the revised project during the third quarter of this year," CEO Andrew Michelmore said in the company's quarterly production report on Thursday. Existing zinc ore stockpiles from trials at Dugald River will be sent to Century to be processed after open pit mining at Century, the world's third largest zinc mine, finishes this year, the company said. MMG also said its massive Las Bambas copper project in Peru, bought from Glencore Plc last year, is 90 percent complete and preparations for commissioning are well underway. The company raised its copper output forecast for this year by 2,000 tonnes to a range of 168,000-183,000 tonnes, and reaffirmed it expects to produce 440,000-510,000 tonnes of zinc. ($1 = 1.2925 Australian dollars) (Reporting by Sonali Paul; Editing by Michael Perry)

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