Sibanye-Stillwater CEO, Neal Froneman announced on Friday that an outbreak of bushfire has significantly disrupted operations at the Century zinc mine in Queensland, Australia.
This setback follows a successful recovery from heavy rains earlier this year, further highlighting the volatile nature of mining operations in the face of extreme weather.
Zinc is extensively used in the auto and construction sectors and Sibanye-Stillwater produced 76 000 tons of the commodity in 2023 while its Century mine has 1.7 million pounds in zinc reserves. Production at the mine has now been disrupted again after the bushfire outbreak.
According to the company, the fire caused extensive loss of surface piping infrastructure, including the feed and water lines that connect the hydro mine to the processing plant and other key service lines.
Nonetheless, the Sibanye-Stillwater operations team at Century had been able to “protect the primary infrastructure” at the mine which includes the processing plant, hydro mine, airport, and underground slurry pipeline.
“This incident once more highlights the threat posed by climate change, leading to significant harm from extreme weather-related events worldwide,” said Froneman.
He added though that incidences of climate change-induced hazards affirmed the company’s purpose to safeguard global sustainability through metals it mine.
He also emphasised the importance of reprocessing of legacy tailings facilities. At the Century mine, Sibanye-Stillwater reprocesses zinc from tailings.
“This setback is unfortunate considering the Century operation had recovered well after heavy rains affected Q1 2024,” he added.
With the safety of employees at Century prioritised and fatalities avoided, Sibanye-Stillwater had already contacted its suppliers for replacement piping.
But due to the amount of piping required, operations at Century mine are expected to remain suspended for nearly a month until 16 November 2024.
Consequently, Sibanye-Stillwater anticipates that its production of zinc metal for the last quarter of 2024 will be lower compared to its forecast by 9 680 payable tons.
Sibanye-Stillwater wholly acquired the Queensland mine, in which it already owned a stake of about 19.9%, from New Century Resources in May last year after tabling an initial offer earlier in the year.
It said at the time that the acquisition had boosted its exposure to tailings re-treatment. Although the mine had previously been battered by adverse weather such as flooding, the company said “production from the Century operation recovered strongly from the flood impacts” of the 2023 first half year period.
For the third quarter period of 2023, Century produced 25 000 tons of payable zinc metal, an increase from the 23 000 tons produced in the second quarter of 2023.
All-in sustaining costs for that period of AUS$1 753 per ton were 13% lower than for the second quarter of 2023, resulting in a significant financial turnaround for the operation as it recorded a $4.6m adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) profit compared to a $36m loss for the previous quarter.
This was after investing $3.1m in capital expenditure during the 2023 third quarter.
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