Take physic, pomp

Volcan closes open pit operations

This is a great hi-res shot of the town of Cerro de Pasco. Click to enlarge (it gets big).
I think we can say “dominated by mining”, no?
Big news for zinc supply. Volcan (VOLCABC1, Lima) is one of the the world’s top five zinc producers. It operates in Peru, itself the third biggest zinc producing country in the world.

Peru’s El Comercio today reports that Volcan has shut down its open pit mining operations at its Cerro de Pasco mines (note that underground mining continues at its mines) and has also cancelled 32 of its 64 service contracts with third party companies (many workers are contracted this way, for example). According to the report, 302 workers have been laid off, a number that may be greater due to the service contract cancellations.

Volcan, owned by the Letts family, is one of the longest-standing mining companies in Peru. It’s also a rather secretive company about its workings. Although (true to form) the company has made no official announcement, El Comercio did well to get a quote out of an un-named company spokesperson who said that many workers had decided to volunarily resign from the company “as they reached an economically favourable agreement with the company, but these are not sackings.”

Whatever. What this means is that the low world prices for zinc and lead (Volcan’s main production along with silver) have claimed another victim. In 2007, full year production at Volcan was 335,926MT…that’s a lot of Zn, people. The metal that came from the open pit won’t be reaching the market any more.

It remains to be seen whether this news gets a greater audience in the mining sphere. Volcan is a big player, but as it only trades on the Lima bourse it tends to get ignored by the retail chat-o-sphere.

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