China’s Minmetals Resources says its Dugald River zinc, lead and silver project in Queensland will cost up to $US1.25 billion ($A1.21 billion) to develop.
The company bought $US1.38 billion ($A1.33 billion) worth of assets, including Dugald River, from OZ Minerals during its global financial crisis fire sale.
Minmetals hopes to gain approval for the Dugald River environmental impact statement in late 2012.
A final decision to proceed with the planned development is expected to follow.
Chief executive Andrew Michelmore said Dugald River was one of the world’s largest, highest grade undeveloped lead and zinc ore bodies.
“Capital cost is between about $US1 billion ($A965.95 million) to $US1.25 billion ($A1.21 billion) and we expect production will occur in 2013,” Mr Michelmore told a teleconference on Thursday, when the miner booked a full year net profit of $US540 million ($A521.61 million).
Chief financial officer David Lamont said between $US155 million ($A149.72 million) and $US170 million ($A164.21 million) would be spent in 2012 on Minmetals’ Century operation in Queensland, Australia’s largest open pit zinc mine, extending the production life of the asset until 2016.
Earnings from Century fell 18 per cent in 2011 because of wet weather, Mr Lamont said.
He also said the high Australian dollar shaved $US95.4 million ($A92.15 million) from Minmetal’s full year earnings.
Minmetals is searching for merger and acquisition (M&A) opportunities after completing its takeover of Australian copper miner Anvil Mining.
Recent speculation has focused on it making a bid for Brazil-focused Mirabela Nickel and Alumina Ltd.
But Mr Michelmore emphasised the Anvil deal gave the predator a platform for further expansion in Africa.
He said M&A was a key plank of the company’s plan to become a mid-tier diversified miner.
“So we need to grow by a factor of about four,” he said.
“We have a list of potential targets that we’re interested in but we have to wait until there is an opportunity.”
