UPDATE 1-Xstrata seeks to extend life of Australia zinc mine

* Xstrata says wants to extend zinc mine life by four years

* Extension will help maximise enlarged Mt Isa concentrator

(Adds details)

SYDNEY, March 31 (BestGrowthStock) – Swiss-based Xstrata (XTA.AX: )
will seek to extend the life of its Black Star zinc mine in
Australia by four years to 2016 at a cost of A$133 million
($122 million), a company spokeswoman said on Wednesday.

The mine is earmarked to yield up to 4.6 million tonnes of
zinc and lead-bearing ore annually and is major part of a
three-mine complex feeding Xstrata’s zinc and lead smelting
facilities in northern Queensland state.

The extension beyond 2012 will enable the company to
maximise use of a nearby ore concentrator, which is being
modified to increase input to 8 million tonnes annually from
6.5 million currently, according to the company.

The three mines — Black Star, George Fisher and Handlebar
Hill — in total yielded 7.4 million tonnes of ore, containing
324,000 tonnes of zinc and 146,000 tonnes of lead.

In 2009, LME zinc averaged $1,595 a tonne, but so far this
year has only dipped below $2,000 once. The price (MZN3: ) is now
around $2,345 a tonne.

“The extension is still in the proposal stage at this
point,” the spokeswoman said.

The proposal will be submitted to Xstrata’s executive
committee for approval in April, she said.

Investing Analysis

(Reporting by James Regan; Editing by Ed Davies)
($1=1.089 Australian Dollar)

UPDATE 1-Xstrata seeks to extend life of Australia zinc mine