Asked about the possible delay, Ozernoye told Reuters it plans next year to produce concentrate “in volume comparable to the previously announced targets”.
Ozernoye officially launched production in September, saying that it would reach full capacity of about 320,000 metric tons of zinc in concentrate in 2025.
That represents 2.5% of next year’s global mined zinc supply estimated at 12.86 million tons, industry group the International Lead & Zinc Study Group (ILZSG) said.
The ILZSG included the ramp-up of Ozernoye in its forecasts of robust growth of 8.9% in new mining zinc supply outside China in 2025.
The sources, who asked not to be named because they were not authorized to speak publicly, said Ozernoye had yet to produce any material as it could not find an adequate replacement for the components that process rocks into powder-form concentrate.
Those parts were damaged by a fire in November 2023.
Ozernoye did not give any production targets when approached by smelters and traders interested in buying their concentrates next year, the sources said.
The components Ozernoye needs were developed and are made by commodity trader Glencore’s subsidiary Glencore Technology. Glencore taps an Australian zinc-lead deposit with a similar mineral composition to that of Ozernoye.
Glencore can no longer sell the concentrator parts to Ozernoye, which the US government placed under sanctions shortly after the fire.
Glencore declined to comment. The Swiss trader-miner said only it would “fully comply with all sanctions applicable to our business activities”.
Ozernoye is working with local company TEM Partner to try to replicate Glencore’s system, one source said. Production may start in November, the same source said.
The company statement said its equipment was made in Russia by its “in-house design bureau”.
It said it expected to achieve “project capacity within a year from the start of commissioning,” without specifying when that was.
“The part of the flotation equipment, which has already been commissioned, is behaving stably and the first batches of zinc concentrates have been received,” it said.
The uncertainty over Ozernoye’s output adds to the impact of other disruption, including Century’s force majeure and a slower-than-expected ramp-up at Ivanhoe’s Kipushi project in Democratic Republic of Congo (DRC).
Reflecting the difficulty of sourcing concentrate, zinc treatment charges (TC), the fees a smelter earns for converting concentrate into refined metal and a gauge of concentrates’ availability, dropped to minus $40 a ton end of September, according to pricing agency SMM.
The lower TC pushed some zinc smelters into losses and they had to cut production.
(By Julian Luk; Editing by Pratima Desai and Barbara Lewis)