Zinkgruvan Lead and Silver Mine, Sweden

Exploiting a zinc-lead-silver orebody near Åkersund on Sweden's Lake Vättern, Zinkgruvan started underground mining in 1857. In the early 1990s, new technology and careful management cut mining and milling costs by about 50%, converting a high-cost operation to the sixth-lowest-cost zinc producer in the Western world by 1993.

Until recently, Zinkgruvan has always been foreign-owned. Australian-based North Ltd purchased Ammeberg Mining from Belgium's Union Minière in January 1996, changing the Swedish entity's name to Zinkgruvan Mining AB in 1997. North made substantial investments prior to being acquired by Rio Tinto in 2000.

In 2004, Rio Tinto sold the operation to South Atlantic Ventures for $101m, the company later changing its name to Lundin Mining Corp. The following year, Lundin reviewed the operation using the latest tools to optimise production and facilitate long-term planning.

On 1 November 2006, Lundin merged with Eurozinc Mining Corp. under the existing Lundin name.

GEOLOGY AND RESERVES

The mine exploits a 5km-long, east-west aligned tabular deposit bounded at each end by sub-vertical faults. Sheet-like orebodies occur in a zone ranging from 2.0–2.5m-thick within an area of precambrian intrusive activity. Faulting divides the deposit into the eastern Nygruvan orebody and the western Burkland and Knalla mining areas.

At end-2005, proven and probable ore reserves totalled 8.16Mt grading 9.7% zinc, 4.7% lead and 98g/t silver. Measured and indicated resources were 1.85Mt at 8.4% Zn, 2.5% Pb and 66g/t Ag while total inferred resources were 8.46Mt at 10.5% Zn, 4.4% Pb and 105g/t Ag.

The mine also has a copper-rich resource located on the hanging wall of the main zinc orebody that comprises 3.5Mt grading 3.1% copper, 49g/t silver and 0.4% zinc but is mechanically challenging. Lundin Mining is now evaluating the viability of developing this zone.

MINING

While some cut-and-fill mining is used, the operation mainly uses single-lift bench and multiple-lift open stoping, the open stopes being paste backfilled. There is a 1.4km-long horizontal rail haulage to the underground crusher and main hoisting shaft at a depth of 800m, while ore mined below this level is hauled to the crusher up ramps by three trolley electric trucks.

Drilling and almost all charging, scaling and rock bolting are mechanised, with electro-hydraulic production drilling now automated. Ore is hauled from the stopes by LHDs. Kiruna Electric truck transport was introduced in 1989 and was boosted in 1995. Diesel trucks have been added, and the Swedish mining contractor, Bergteamet, has recently added new equipment.

ORE PROCESSING

The concentrator was built in 1977 and capacity was later increased from 600,000 to 750,000t/y. Autogenous and ball mills liberate galena and sphalerite minerals, which are extracted by a rougher-scavenger flotation followed by pebble regrinding and cleaning. This bulk concentrate is separated into 74–78% lead and 55–58% zinc concentrates, the lead being cleaned in a fourth line of cells.

To handle higher-grade feed, North decided to increase flotation retention time by replacing the existing cells with 22 larger Svedala (now Metso Minerals) Sala RCS cells, so avoiding the need to build new space.

Recovery rates improved and the cells enabled Zinkgruvan to avoid silica content penalties previously exacted by customers. An ABB process control system was installed in 1999. The concentrates are dewatered by Larox and Svedala pressure filters and trucked 100km to a port on Lake Vänern for shipping by bulk carriers to customers in Europe.

PRODUCTION

In 2004 the concentrator treated 732,800t of ore to yield 61,547t of zinc metal, 31,448t of lead and 2.04Moz of silver in concentrates. Lundin Mining achieved an output of 803,883t of ore during 2005, slightly above the target of 800,000t. The average zinc grade was 9.4% and the lead grade 5.1%. The contained zinc and lead output also increased significantly, to 69,981t and 36,674t respectively. The zinc cash cost of production was approximately $0.27/lb, net of byproducts.

Typically, all of Zinkgruvan's output is sold on long-term contracts. However, in late 2004, Lundin Mining sold all of the mine's future silver production to Silver Wheaton Corp. for an up-front payment of $50m in cash plus shares and options as a means of raising funding for its other development interests.