The Queensland government has recently granted the approval to Xstrata Zinc Australia's expansion project of the George Fisher Mine in Mount Isa.

With this expansion approval, which was estimated to entail AUD274 million (USD246 million), will eventually increase production by almost 30 percent from the year 2013, a statement from Xstrata Zinc Australia said.

Xstrata Zinc Australia Chief Operating Officer Mr Brian Hearne said the expansion of the underground mine is indicative of the strategic opportunities for growth within the group's assets.

"George Fisher Mine contains one of the largest zinc reserves in the world and the expansion project enables us to further tap its significant resource potential," Mr Hearne said.

The George Fisher Mine (GFM) expansion follows the approval of the AUD133 million Black Star Deeps open cut development to bring the total value of new mining projects in Mount Isa announced by Xstrata Zinc this year to AUD407 million (USD362 million).

Both projects ensure the full utilisation of the zinc-lead concentrator capacity in Mount Isa which was raised to 8.0 million tonnes per annum in 2009.

The GFM expansion will increase the annual production rate from 3.5 million tonnes per annum to 4.5 million tonnes per annum and will create jobs for an additional 250 contractors in construction and 120 employees in its operation.

The project involves the development of a second hoisting shaft and associated infrastructure to service the northern area of the mine using large diameter raise boring technology. It will also include the installation of an underground crushing and ore handling facility and upgrades to power and air ventilation services. An existing shaft servicing the northern end of the mine will be lined and extended by 420 metres to a depth of 1,140 metres.

The Xstrata Executive Committee approved the development on 29 September 2010. The Queensland Government's approval of a Mine Plan Variation for the project was received on 28 October 2010.

The Mine Plan Variation was prepared based on a 14 month, AUD6.5 million feasibility study which found the project would cause minimal changes to the mine's current environmental conditions.

Mr Hearne said the expansion project had been encouraged by a 126% increase in zinc reserves from 33 million tonnes when Xstrata acquired the operation in 2003 to 76 million tonnes this year.

"While the increased production rate will reduce the life of mine by five years to 21 years, the orebody remains open at depth to the north of the mine," he said.

"The additional production capacity built into the expansion project and our ongoing exploration program will ensure GFM remains a key part of our long term strategy for Mount Isa."

Work will commence immediately on the 2.5 year GFM expansion project with equipment mobilised to begin ventilation shaft works during November.