Global zinc production is expected to recover by 5.2%, to reach 12.8Mt in 2021, after registering an estimated 5.9% decline to 12.1Mt in 2020, mainly due to Covid-19 related lockdowns and restrictions, with the increase supported by high output growth in Bolivia (+53.6%) and Peru (+9.4%).
Production from Bolivia, the most affected due to the pandemic in 2020, is expected to recover well, owing to the mines returning to production, such as the Colquiri, Cerro Rico and San Cristobal mines, where output was earlier impacted due to the Covid-19 induced suspensions.
In Peru, production is expected to increase by 9.4%, to reach 1.5Mt, in 2021 with a rise in production primarily from the Chungar Mining Unit, and El Porvenir and Cerro Lindo mines, as operations return to full capacity. In contrast, production is expected to decline in Canada (-5.8%) and Brazil (-19.2%), mainly due to scheduled mine closures and planned maintenance shutdowns. Looking ahead, zinc production over the forecast period (2021-2025) is expected to grow at a CAGR of 2.1%, to reach 13.9Mt in 2025. The US, India, Australia and Mexico will be the key contributors to this growth. Combined production in these countries is expected to increase from a forecasted 3.6Mt in 2021 to 4.2Mt in 2025.
Key upcoming projects include the Aripuana Zinc project in Brazil, which is jointly owned by Votorantim SA and Karmin Exploration and is currently under construction. By March 2021, 79% of the construction works were completed. During Q1 2021, the company invested $40m in the project, taking total investment to $353m since the beginning of construction. The project will have an annual zinc production capacity of 72.7kt and is expected to commence operations in the third quarter of 2022.
Another major development is the Pavlovskoye project in Russia, which is 99.5%-owned by State Atomic Energy Corporation Rosatom and is currently undergoing a definitive feasibility study. The lead-zinc-silver project reported mineral resources of an estimated 55Mt, with an average zinc grade equivalent to 4%. The $400m project will have an annual zinc production capacity of 223kt and is expected to commence operations in 2023.
Lastly, the Kudz Ze Kayah project in Canada, which is wholly owned by BMC (UK), is currently undergoing a definitive feasibility study (DFS) and awaiting regulatory approvals and permissions. In August 2020, the company announced that the assessment board had begun preparing its final screening report for the proposed mine development and in November 2020, the company issued an updated DFS for the project. The project will have an annual zinc production capacity of 106.6kt and is expected to commence operations in 2023.
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