News

June 03, 2009

Griffin Mining Re-Opens The Caijiaying Mine In China, Just In Time To Capitalize On A Strengthening Zinc Price

By Alastair Ford

“It’s nice to be back in operations again, now the processing plant is operating again, now we’re mining”. So says Roger Goodwin, London point-man for Chinese-focused zinc miner Griffin Mining. It was, he says, rather depressing visiting the company’s flagship Caijiaying project while it was undergoing what the company termed “development, maintenance work, and plant upgrades”. But he’s not feeling depressed now, now that the company has pressed the “go” button on production once again, especially given what broker Ambrian terms the “resurgence” in the zinc price. From the time Caijiaying was shut-down, at the end of December 2008, till the time it was switched back on again, on 1st June 2009, the zinc price has risen by more than 50 per cent to a current price of over US$1,547. Roger always was confident that the zinc price would come back during that period, but it’s nice to see him proved right all the same.

Still, that said, zinc’s still at less than half the price it was trading at in the glory days of 2006 and 2007, when Caijiaying was up and running and just hitting its stride. Back then Griffin was also entitled to 100 per cent of the profits from Caijiaying. But that dropped to 60 per cent as of July last year, in accordance with the deal that Griffin has with its joint venture partners. So, although it’s nice for Griffin that zinc is back on its uppers, there’s still a way to go before the...