Nyrstar says they are in the early stages of investigating redevelopment of the smelter, but it’s too early to speculate on the outcome.
In a statement released from Belgium, Nyrstar made it clear that current smelting profits were not as high as they would need to be for the company to invest their own money in redevelopment of the smelter.
“Any investment by Nyrstar would target returns and operating margins more similar to those of upstream mining assets than to the current smelting returns and margins of the Port Pirie smelter,” the company said.
They also said investment in Port Pirie would need to be value accretive – that is, it would to need add more value than the cost of the redevelopment.
“Any investment by Nyrstar in the redevelopment of the Port Pirie smelter would only occur on the basis that it was value accretive and generate returns which would meet or exceed Nyrstars stated investment criteria for upstream acquisitions,” the company stated.
The company is seeking financial and non-financial assistance from the Federal Government to aid the redevelopment, which they estimate will cost $350 million.
“These discussions are at a preliminary stage and it is not possible to indicate what the outcome might be,” Nyrstar said. The company also hit back at recent negative media coverage, which they stated was “out-dated” and contained a number of inaccuracies.
A national newspaper last week ran a number of articles speculating that the smelter may close. This has caused uncertainty and unrest within the local community.
Redevelopment of the smelter would deliver a “significantly improved environmental footprint” and utilise technology that processes and recycles a wide range of high value raw materials.
Nyrstar general manager Glenn Poynter was unavailable for comment.