By Julian Luk
Western sanctions on Russia’s zinc miner Ozernoye have left it struggling to replace equipment needed to ramp up output, potentially leading to a shortage of zinc concentrate and impacting global zinc supply forecasts for 2025, according to sources familiar with the matter. This could result in higher zinc prices due to concerns over tight supplies.
Ozernoye, which planned to produce 320,000 metric tons of zinc in concentrate next year, represents a significant portion of the global mined zinc supply. The delay in production is attributed to the inability to find suitable replacement parts following a fire that damaged crucial components.
The company is working to replicate the equipment with the help of a local partner, but the uncertainty surrounding its output adds to other disruptions in the zinc market, such as Century’s force majeure and delays at other mining projects.
The impact of these challenges is reflected in zinc treatment charges (TC), which have dropped to minus $40 a ton, forcing some smelters into losses and leading to production cuts. This could have a ripple effect on the availability and pricing of zinc concentrates in the market.
Overall, the situation at Ozernoye highlights the fragility of the zinc supply chain and underscores the importance of diversifying sources to mitigate risks associated with geopolitical tensions and unforeseen disruptions in the industry.