ZINC
Mississippi Valley Type Zinc Deposits
April 2019
Mississippi Valley Type (MVT) zinc deposits have long been a stable source of high-quality, high-grade zinc concentrate, accounting for 5% of global mined zinc. However, over the next 15 years, AME expects many large long life MVT mines to close, reducing the amount of clean zinc concentrate available. New mines on MVTs are not expected to replace the lost production as a lack of suitable deposits and high operating costs limit the number of MVTs being developed.

Mississippi Valley Type (MVT) Zinc Deposits

Mississippi Valley Type, or MVT, deposits are a family of epigenetic deposits primarily forming in dolostone and limestone with lead and zinc as the primary commodities. MVTs, are named after the Central Mississippi Valley in the United States where lead and zinc have been extracted for more than 100 years. This deposit style is not confined to the United States. Major MVT deposits are located in Ireland, Canada, and Poland. MVTs tend to form in districts or along trends of multiple deposits.

Tectonically, MVT deposits are found in carbonate platform sequences or orogenic forelands, presenting as stratabound bodies and veins. The deposits are not related to igneous rocks. Mineralisation is hosted by features such as faults, lithological margins, and breccias.  Ore minerals are primarily sphalerite and galena.

 

 

Zinc grades of MVT deposits are mostly between 1% and 10%, averaging about 7%. Many MVT deposits are enriched in other elements, including combinations of lead and silver. However, some deposits such as those at Nyrstar’s East Tennessee Mines contain almost no by-products. Occasionally, MVT deposits will have concentrations of copper (e.g. Doe Run’s Viburnum Trend deposits in the US). However, copper grades in MVTs rarely exceed 0.3%.

Deposit sizes for MVTs can vary greatly. Most are relatively small, containing less than 10Mt of ore.  However, a confined area may contain multiple deposits. For example, the ZGH Boleslaw operation in Poland consists of three deposits, Boleslaw, Olkusz and Pomorzany. These three deposits have fed a central mill for more than 70 years at approximately 2Mtpa of ore. 

The currently operating MVT mines primarily lie in the fourth quartile of the zinc cash cost curve. A lack of by-product credits at current MVT operations keep the cost high on a per pound of zinc basis. The other significant contributing factor is the mining method employed at MVT deposits, which is most commonly room-and-pillar. Room-and-pillar mining requires a high 

number of employees for a low utilisation rate due to the number of vehicle interactions. This limits the ore tonnes per shift contributing to a higher mining cost. Room-and-pillar mining of MVT deposits also limits ore recovery to approximately 75-80%, unless miners go back for pillar recovery.

While there are disadvantages for MVTs, there remain a few key advantages to the deposits. Due to the low formation temperature of MVTs, the iron content tends to be low in the sphalerite. This results in a high-quality, high-grade very marketable zinc concentrate with few impurities or penalty elements. MVTs also potentially limit acid mine drainage. As MVT ore is primarily hosted by carbonates, the surrounding rock buffers potentially acidic mine and tailings water. 

 

Producing MVT Mines

Major operating mines extracting MVT deposits include Tara (Boliden), East Tennessee (Nyrstar), ZGH Boleslaw Mines (ZGH Boleslaw) and Viburnum Trend (Doe Run). Globally, MVT deposits comprise approximately 5% of total concentrate production. AME expects this percentage to drop over the next 15 years as a number of long-life operations close.

 

 

MVT Project Pipeline

AME expects only one MVT deposit to add to base case supply in the short to medium term. This is Canadian Zinc’s 48ktpa Prairie Creek in 2021. AME sees this as a result of a lack of development in recent years stemming from low zinc prices and reduced exploration budgets. In the longer term, we expect Iran Zinc Mines Development Group (IMIDRO) to commission the 400ktpa Mehdiabad mine in 2021. Outside of this, Rathdowney Resources’ 117ktpa OLZA and Metalicity’s 85ktpa Admiral Bay are two MVT projects that may possibly be developed. 

IMIDRO’s 400ktpa Mehdiabad

IMIDRO is bringing Mehdiabad on line as a large-tonnage, shallow, open-pit deposit with an average zinc grade of around 4.5%. Mehdiabad is expected to have a mine life of approximately 25 years producing up to 400ktpa of zinc in concentrate from both sulphide and oxide ores. Capital cost of the project is estimated at US$1.5bn. While AME does not expect any open-pit mining issues for the operation, 180Mt of pre-stripping must be completed. Pre-stripping is underway with IMIDRO selling unprocessed zinc oxide and barite ore.

Canadian Zinc Corporation’s 48ktpa Prairie Creek

Canadian Zinc's Prairie Creek in the Northwest Territories of Canada is an MVT deposit with the potential to produce 48ktpa of zinc in concentrate. The Prairie Creek project still requires financing, but it has significant infrastructure already in place, including a 330ktpa mill, 5km of underground development, access roads, an airstrip, accommodation and other associated buildings. Prairie Creek will produce high-grade concentrates. However, the zinc concentrate will contain high levels of mercury of between 0.02% and 0.3%, that will result in smelter penalties. Regardless of the high mercury content, Korea Zinc and Boliden have signed memorandums of understanding for the zinc concentrate. The site is expected to be a relatively low-cost producer with high by-product revenues from lead and silver. AME expects the site to begin commercial operation in 2021 and to operate for approximately 15 years.

Rathdowney Resources’ 117ktpa Olza

Rathdowney Resources’ 117ktpa Olza project in Poland is at feasibility stage. AME considers the project likelihood as possible. The project contains 24Mt of Inferred Resources at 5.5% zinc and 1.5% lead. Rathdowney is seeking to secure additional financing while advancing permitting and mine planning studies. AME believes that if the project were to go ahead, initial capex would be lower due to onsite grid power, railway access and road access. Furthermore, it could become an important feedstock to the ZGH Boleslaw smelter when the Boleslaw mines close in 2020. The Olza project is approximately 10km from the ZGH Boleslaw smelter.

Metalicity’s 85ktpa Admiral Bay

Metalicity’s 85ktpa Admiral Bay project is in the Canning Basin, Western Australia. The project has approximately 170Mt of Inferred Resources grading 4.1% zinc, 2.7% lead and 25g/t silver with mineralisation located more than 1km below surface. The deposit is flat lying over significant widths. Metalicity is considering alternate mining methods. To reduce mining costs, Metalicity is assessing use of a CAT Rock Straight System which is a fully mechanised longwall system adapted to hard rock conditions. Limiting factors to Admiral Bay advancing are its depth, low zinc grade and the geotechnical and geothermal complexity.