Teck Cominco Ltd. and Xstrata Plc will close their joint-venture Lennard Shelf Pillara zinc mine in Western Australia earlier than planned because of a decline in zinc prices and the rising Australian dollar.

Operations will end by early August, Vancouver-based Teck said today in a statement distributed by Marketwire. It had planned to shut the mine in the final quarter of 2009, according to a statement in April that brought forward the closure by a year.

Zinc, used to galvanize steel, has fallen 16 percent this year amid rising inventories, and was the biggest loser on the London Metal Exchange last year. China's smaller zinc and lead smelters agreed July 12 to cut output 10 percent to support prices and ease a power shortage, and bigger producers may follow.

``This demonstrates there is a lot of production that has increased in recent years that is comparatively on the high-cost side,'' said Gerard Burg, a minerals and energy economist at National Australia Bank Ltd., in Melbourne. ``Zinc prices need to remain at historical highs given the current climate of high energy costs and high labor costs to justify production.''

Teck rose 68 cents, or 1.6 percent, to end at C$43.90 on the Toronto Stock Exchange before the statement was issued. Xstrata stock gained 2.7 percent in London to 3,880 pence.

`Become Uneconomic'

The mine ``has become uneconomic, primarily due to the sharp decline in zinc and lead prices compounded by the appreciation in the Australian dollar,'' Teck said in today's statement.

The Australian dollar has risen 11 percent this year, cutting profits for companies whose sales are in dollars and costs are in local currency.

Macquarie Group Ltd. lowered its zinc price forecast 11 percent yesterday, predicting the metal will average 95.3 cents a pound this year. Global zinc inventories are 152,175 metric tons today, according to Bloomberg data, from 68,950 tons a year ago.

Zinc supplies will exceed demand by 215,000 metric tons this year, the International lead and Zinc Study Group said. The market may swing to a deficit in 2010 and 2011, Teck said in May.

The mine produced 42,100 tons of zinc and 12,400 tons of lead in 2007. It will now be placed on care and maintenance until a decision about its long-term future can be made, the company said.