Two of our operations — Çayeli, Turkey and Pyhäsalmi, Finland — produce zinc concentrates.
How it’s mined and produced
More than 50 countries around the world mine zinc ore, with Australia, Canada, China, Peru and the United States being the largest producers. About 80 percent of the world’s zinc is mined underground while 8 percent is mined open pits with the rest using a combination of both methods.
Zinc metal is produced in two ways:
- via pyrometallurgy — uses high temperature to transform metals and their ores into pure metals, intermediate minerals or alloys
- via hydrometallurgy — uses wet process to separate metals from ore or from alloys and to purify metals or concentrates.
The most common process is pyrometallurgy where zinc sulphide (
sphalerite) minerals enriched to 45-60% zinc containing concentrates by
froth flotation method, then smelted to obtain zinc oxide. The zinc oxide is then leached in sulfuric acid and purified using zinc dust. The metal is extracted by
electrowinning to finally produce cathode zinc.
How it’s used
Zinc is used in different industries and in different ways:
- protective coating on steel to prevent corrosion (galvanizing)
- die casting for precision components
- construction material
- an alloying metal with copper to make brass
- chemical compounds in pharmaceuticals, cosmetics, rubber, primer and paint
- micronutrients for humans, animals and plants.
The graph below shows the use of zinc by end use.
Supply vs. demand
Zinc is the fourth most used metal in the world, after iron, aluminum and copper. The chart below shows the change in the supply and demand for zinc since 2000. Demand is estimated to increase by two to three percent per year, particularly in industries such as construction, automotive and transport because of zinc’s long useful life.
Zinc prices
Like copper prices, zinc prices are mainly affected by global supply and demand. They’re also affected to some extent by fluctuating exchange rates and demand from the investment community.
The market prices for refined metals are affected by many factors beyond our control. These factors include:
- regional supply and demand
- political and economic conditions
- inflation expectations
- speculative activities
- production costs in major producing regions.
The graph below shows the change in metal prices over the last several years.
Our zinc business
Zinc is sold as zinc concentrate to international zinc smelting companies and to merchants.
Like copper, we sell most of our zinc concentrate under long-term contracts. We also sell on the spot market where the economic return is more volatile than in the long-term market.
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