Nyrstar secures $135m bailout from federal, South Australia, Tasmania govts as it struggles with Chinese market distortion
Lead and zinc refiner Nyrstar, a global company which is a subsidiary of Singapore-headquartered commodities company Trafigura, has loss making ventures in South Australia's Port Pirie and in Hobart.
It pushed for government assistance earlier this year amid concerns of going under.
Local boss Matthew Howell has claimed that China is 'distorting global markets' and 'eroding global operating margins' which has 'imperilled the commercial viability of domestic processing' across Western nations.
Industry Minister Tim Ayres and South Australian Premier Peter Malinauskas addressed reporters on Tuesday to confirm it would back the company which directly employs 1400 workers and indirectly supports 6600 jobs, according to Nyrstar.
Mr Ayres said the funds would enable Nyrstar to upgrade its facilities which Mr Howell had previously said needed refreshing to compete with China.
'The maintenance and engineering upgrades are going to require hundreds of additional workers as contractors here in Port Pirie and in Hobart,' he said on Tuesday.
'That's going to make a big difference in terms of the maintenance supply chains and the economic viability of this vital industrial community.'
Mr Malinauskas said the South Australian government's contribution for the Port Pirie plant was crucial for setting the location up for a 'more prosperous future' as the industry faces domination by China.
'We know there is a journey in front of us to be able to tackle the challenges we see, particularly coming out of China,' the SA Premier said.
'We should be up-front and honest about them. When people contemplate - is this an appropriate investment on behalf of taxpayers? - one also has to think about the counterfactual.
'The counterfactual would be to allow the Western world to see China consolidate all of … the world's smelting capacity, which would mean that we don't get to participate in the critical mineral and critical metal supply chain of the future.'
Mr Howell has claimed the Chinese government subsidises companies to purchase Australian materials at prices local smelters could not afford.
China then subsidises the processing of these materials and enforces export controls on the finished metals.
The practice was crippling Nyrstar's Australian operations, according to Mr Howell who in June warned its Port Pirie operation was losing tens of millions each month and needed urgent government help.
Nyrstar's Global CEO Guido Janssen said the company was particularly appreciative of the help in 'the face of extremely challenging global market conditions'.
'This support demonstrates the strategic importance of the Australian operations for sovereign capability and delivering the products needed globally for modern economies,' Mr Janssen said.
'This announcement is a credit to the teamwork and excellence of our teams at Port Pirie and Hobart and is an important step forward as part of our global focus on increasing critical and strategic metals production.'
The manufacturer will receive $57.5m from the federal government, $55m from South Australia and $22.5m from Tasmania.
Nyrstar produces materials that are critical for batteries, flame retardants, semiconductors and solar panels amongst other items.
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