What if the zinc price falls further - how low do zinc prices go before mines close?

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After the zinc price fell by 37% from its 2023 high and Boliden closing its Tara mine in Ireland. The cost structure of the zinc mining industry is now in focus amid concerns that other mines will be placed on care and maintenance. Wood Mackenzie’s mine cost data allows the identification of mines that are likely to be operating at a loss and judgements can be made on potential cuts to future supply from suspensions or mine closures. Not all mines at loss in the short term are likely to close for a number of reasons but a large proportion typically do. In this insight, we have reviewed previous zinc price downturns and resulting mine production losses to analyse the current cost structure to better quantify likely production losses from further price falls.

Table of contents

    • The falling zinc price and best measure of short-term economic stress
    • The decision to suspend
    • When have mines closed in recent price downturns?
    • Low price Scenarios for 2023
    • Likely losses from a sustained sub $2250/t zinc price in 2023
    • Zinc mines are less price-elastic than copper mines
    • Implications of mine closures and cuts to production

Tables and charts

This report includes 3 images and tables including:

  • Three recent periods of price-induced mine cutbacks. Percentage of mines operating at a loss and the tonnage cut
  • 2260kt Zn of mine production operating at a M1 cash loss at $1750 zinc price – price cuts into the cost curve to the 76th percentile
  • Scenario results at different zinc prices

What's included

This report contains:

  • Document

    What If The Zinc Price Falls Further.pdf

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