Even as economic growth within the country during 2003 spurred an increase in consumption of zinc metal in the domestic market, business was felt a negative impact from the high cost of raw materials, particularly imported zinc sulphide concentrate, and the increase of other fundamental expenses such as electricity and fuel. Therefore, the company exercised caution in conducting operations and accelerated measures to reduce costs and generate more income by marketing value-added products. The following is a summary of important undertakings during the year.


In 2003 the company successfully raised the proportion of zinc silicate ore in its production mix in order to alleviate the high costs associated with importing raw materials. The increased utilization of zinc silicate ore boosted production at the Mae Sot mine by 36% compared to 2002, to 149,539 dmt with an average of 25% zinc content. A portion of this high quality zinc silicate ore was produced by upgrading low quality ores, that which contains a zinc content of approximately 8% into a higher quality ore with zinc grade of 32%, through the process of Flotation. This year the company enhanced its existing Flotation plant capacity to accommodate up to 18 dmt per hour. In addition, during the first quarter of the year construction of a full-scale Flotation plant began, which will be able to process 36 dmt per hour with an annual production capacity of 60,000mt. The Baht 250 million project was completed in December of 2003 and will enable the company to further reduce production expenses.

The zinc silicate ore produced at the Padaeng mine in Mae Sot district of Tak province is fed to the zinc smelter located in Muang district of Tak province. The silicate ore is refined together with zinc ore from other sources in the production process. The Padaeng mine is in its twentieth year of operations and presently contains mine resources of 4,102,000 dmt with an average zinc grade of 12.3%.