Australia clears Xstrata to restart McArthur River zinc mine

Xstrata (XTA.L: Quote) will immediately restart its controversial McArthur...

Xstrata (XTA.L: Quote) will immediately restart its controversial McArthur River lead and zinc mine in northern Australia after the Australian government approved the mine’s expansion.Some Aboriginal groups had appealed against a decision by Australia’s previous government to approve Xstrata’s plan to divert the river to expand the mine, bringing operations to a halt on Dec. 17.Environment Minister Peter Garrett said in a statement on Friday the mine was clear to restart as long as Xstrata monitored the environmental impact on the 385-kilometre (185-mile) McArthur River.Xstrata Zinc Australia Chief Operating Officer Brian Hearne said the mine would restart immediately."We now have certainty about the future of McArthur River Mining and are working rapidly to mobilise our workforce," he said in a separate statement.Xstrata had warned failure to let the expansion proceed would spell the end of the operationThe mine opened in 1995 as an underground operation, yielding 320,000 tonnes annually of lead and zinc in bulk concentrate, or ground ore, form. Its output is sold mostly to Europe and Asia, where it is smelted.The underground veins have been mined out but the site still contains one of the world’s largest deposits of zinc and lead. Xstrata has said that by converting to open pit it can operate another 25 years at the same level of production.However, Xstrata had already cut ore production by 20 percent because of low metals prices, before the December suspension, resulting in the loss of 68,000 tonnes of concentrate, containing 31,700 tonnes of zinc metal and 7,200 tonnes of lead. Garrett said new conditions allowing reactivation of the mine included a comprehensive monitoring plan for marine sediment, mine site sediment, seawater, natural surface water and groundwater."In reaching my decision I also took into account the financial and employment benefits of the mine expansion for the region, but I have strongly encouraged McArthur River Mining to pursue a more active engagement with local stakeholders including traditional owners," Garrett said. (Reporting by James Regan)