Metals firm Nyrstar may close or curtail output at two smelters in the south of Australia if a second phase of transitional funding is not agreed with Canberra and state governments.
The 160,000 t/yr lead smelter at Port Pirie in South Australia state and the 280,000 t/yr Hobart zinc smelter in Tasmania received A$135mn ($97mn) in interim rescue funding in August last year, but a concrete solution is yet to be found, Nyrstar said on 1 May.
The comments from Nyrstar, which is owned by commodity trading firm Trafigura, came after the first round of assistance expired yesterday.
Workers have been told that, without a second phase of the funding plan having been agreed, Nyrstar is now exploring all options for the uneconomic facilities — which are partway through two-year feasibility studies to diversify output — by processing critical minerals such as bismuth and tellurium.
Argus understands that no decision has yet been made on closures or cutting output, as happened at Hobart last year when market conditions for zinc deteriorated. Capital expenditure and operational costs are likely to be in line for any cuts as part of the review.
The first shipment of antimony, a venture agreed under last year's first-phase agreement, was exported from the Port Pirie pilot plant in February, which Nyrstar said could produce 2,000 t/yr by the end of this year.
Australia aims to maintain current industrial capability under its Future Made in Australia policy, which the Labor government says will leverage renewable energy to export low-carbon goods including metals.
A series of deals have been cut with processors in recent months including aluminium and copper manufacturers facing closure due to low commodity prices and higher energy costs.
