Xstrata is set to boost ore production by a further third at its Lady Loretta mine in north-west Queensland, Australia.
The greenfield underground zinc-lead-silver mine began ore production ahead of schedule in September and commercial-scale mining is due to commence in mid-2013.
The expanded production rate of 1.6m tonnes a yearis expected by 2016, the firm said.
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It was was originally expected to produce one million tonnes of ore a year.
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But an internal study identified an opportunity to increase the maximum output of the mine by reviewing stoping sequences over its lifetime.
This is the second project announced this year to accelerate production and the latest expansion increases maximum output by 60% over the original mine plan.
It brings the total investment to develop the mine to date to AU$362.2m, equivalent to $356.4m.
Xstrata Zinc Australia's Chief Operating Officer, Brian Hearne, said the expansion project would allow the earlier recovery of resources from several of Lady Loretta's upper ore bodies and increase the number of stoping levels available in the underground mine in future years.
"To achieve this, we are investing in larger ore handling facilities, increased mobile and fixed plant equipment including an expanded ventilation system, more village accommodation and utilities upgrades," he said.
The Lady Loretta deposit contains an estimated 12.7m tonne reserve, consisting of a 14.2% zinc and 4.8% lead grade, alongside 84 grams of silver per tonne.
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