Mount Isa Lead, Zinc and Silver Mine,

Australia

A 1923 silver-lead ore discovery in Queensland, Australia, lead to the formation of Mount

Isa Mines and the development of one of the world's great mines. By the 1960s, Mount

Isa was the hub of a lead, zinc, silver and copper supply network, including smelting,

refining and recycling facilities in Europe.

In 1970, MIM Holdings succeeded Mount Isa Mines but, while diversifying in the 1970s

and 1980s, management seemingly neglected Mount Isa. Revitalisation started in the late

1980s. The rising cost of processing Australian intermediates led MIM to withdraw first

from copper and then lead-zinc smelting activities in Europe. These, plus improvements

at MIM's coal operations, encouraged Xstrata to make an offer for the Group which took

effect in mid-2003. Swiss-based and and partially owned by Glencore International,

Xstrata has widespread ferroalloy, zinc and coal interests, to which it added world-class

nickel and copper assets with its take-over of the Canadian company, Falconbridge, in

2006.

GEOLOGY AND RESERVES

Today, the 320km Mount Isa lease encompasses not only the Isa operations but also the

George Fisher mine. The ore mineralisation is stratiform, occurring in the 1,600 million-

year-old Lower Proterozoic Urquhart Shale sequence. At Mount Isa, the sequence is 1km

thick and dips at 65. The orebodies lie within the upper 650m and are bounded by the

Mount Isa fault on the west and by volcanic greenstones to the east. Comprising galena

and sphalerite with pyrite and pyrrhotite, the lead-zinc-silver orebodies are concordant
with carbonaceous dolomitic sediments, interfingering with the silica-dolomitic mass

hosting copper. Over 20 ore zones are mineable, each up to 1.4km long by 800m deep

and from 4m to 48m wide.

As of mid-2005, Xstrata reported that the underground Isa lead mine had proven

reserves of 0.4Mt grading 5.9% zinc, 4.7% lead and 140g/t silver, and measured

resources of 1Mt at approximately 7.3% Zn, 6.3% Pb and 180g/t Ag. The Black Star

open-pit mine is based on reserves of 23.9Mt grading 5.1% zinc, 3.1% lead and 60g/t

silver. Outside the Black Star project, the Mt Isa area has an open-pit mineable resource

of 84.5Mt grading 4.1% zinc, 3.5% lead and 82g/t silver.

The Isa mine, concentrator and crude lead-smelting operation started in 1931. Today's

lead mine has one 1,144m-deep shaft (R62) providing the main service access to nine

levels between 611m and 1,076m below surface and skip ore hoisting from the crushing

system on Level 20. Two rail systems, one on Level 15 and the other on Level 19, dump

ore and waste to the crushing station. Level 19 trains also haul from the X41 copper mine

to crushing stations at the base of the U62 hoisting shaft. In 2002, MIM installed a

Micromine mine control system.

Large stable sections are open-stoped from sub-levels; below, weaker parts of the

hanging wall slices up to 12m wide and 250m long are mined by bench stoping, which

replaced cut-and-fill in the early 1990s, reducing costs and increasing productivity. MIM

invested in flexible mobile equipment from competing suppliers and introduced

centralised tele-remote ore loading. Various fill formulations based on combinations of

process wastes, rock and cement, stabilise the voids.

The new 2.3Mt/y Black Star pit, sited above the Lead mine and based on 25Mt of

reserves, started production early in 2005 and yielded 1.4Mt of ore by the year-end.

Mining should continue for 11 years.

ORE PROCESSING
The present lead mine concentrator was built in 1966 with rod and ball milling, lead-silver

flotation, zinc flotation and low-grade middlings recovery circuits. In 1982, MIM added

heavy-medium separation to pre-concentrate the mill feed. Later enhancements have

included column cell flotation. To process the George Fisher ores, Isa increased the

plant's capacity to 2.5Mt/y in mid-2000, adding ISAmills for ultra-fine regrinding and

improving the cleaner flotation and thickener operations to increase the recoveries,

concentrate grades and throughput.

A blast furnace converts sintered lead-silver concentrate to lead-silver bullion for

subsequent refining at the Northfleet refinery in the UK. Zinc concentrates are currently

exported and low-grade middling concentrates go mainly to Imperial Smelting Process

plants.

PRODUCTION

Performance improved again in 2005. The mines delivered 4.78Mt of ore, of which 4.4Mt

were treated, yielding 231,000t of zinc in cencentrates, 160,000t of lead-in-bullion and

11.36Moz of silver in crude lead. The cash cost after by-product credits was US$0.329/lb

of zinc.