Latest news with #Nyrstar
Nikkei Asia
07-07-2025
- Business
- Nikkei Asia
Glencore, Rio Tinto and Trafigura seek aid for Australian smelters
The Mount Isa Mines complex forms the hub of Glencore's copper and zinc operations in Queensland, Australia. © AAP SHAUN TURTON SYDNEY -- Resource giants Glencore, Rio Tinto and Trafigura-owned Nyrstar are seeking potentially billions in government aid for Australian metal smelting and processing operations under threat from rising power costs and Chinese competition. Glencore's copper smelter and refinery in Queensland, Rio Tinto's jointly owned Tomago aluminum smelter in New South Wales, and Nyrstar's zinc smelter in Tasmania and multi-metal plant in South Australia face significant challenges, according to the companies, who are negotiating with state and federal authorities.
Reuters
04-07-2025
- Business
- Reuters
Metals smelting is the West's next critical minerals crisis
LONDON, July 3 (Reuters) - Global supply chains are already reeling from the impact of China's rare earth export controls, but an even bigger critical minerals threat is looming. Western metal smelters are in crisis. China's rapid expansion of processing capacity is crushing margins across the metallic spectrum. Copper smelters in Namibia and the Philippines have recently been placed into care and maintenance after processing fees turned negative. More are at risk. Glencore (GLEN.L), opens new tab has warned that its Mount Isa copper smelter in Australia is financially unviable after related mining activity stops this month. The Australian government is also facing urgent calls for help to save Nyrstar's zinc and lead smelters and Rio Tinto's (RIO.L), opens new tab Tomago aluminium smelter. China's share of global base metals smelting has been steadily increasing, and the country is approaching the same level of dominance that has allowed it to weaponise exports of more esoteric critical minerals such as tungsten and bismuth. Chinese smelters have just agreed a mid-year copper concentrates supply deal with Chilean miner Antofagasta (ANTO.L), opens new tab which prices their conversion fee at precisely zero. At least it wasn't negative, unlike the spot market, where copper smelters have actually been paying miners for raw material. This is a total inversion of historical pricing. Copper smelters can make money from by-products such as gold, silver and sulphuric acid, but smelting and refining charges are the core revenue stream. Or at least they should be. Zinc smelter charges also turned negative in the fourth quarter of last year. Spot fees have since recovered to $55 per metric ton, still short of this year's benchmark of $80, which was itself the lowest annual charge in at least 50 years. Yet zinc mine production is booming, up 5.1% year-on-year in January-April, and so are China's imports of zinc concentrates. Arrivals more than doubled to over 2.2 million tons in the first five months of 2025. The problem is not simply one of constrained mine supply. Low fees in both zinc and copper markets also reflect a super-charged expansion of Chinese smelting capacity over and beyond what the world's mines can feasibly supply. The result has been an implosion in treatment charges and in smelter profitability. China's share of global refined zinc production rose from 33% in 2007 to almost 50% in 2024, according to the World Bureau of Metal Statistics. The country also produces around 60% of the world's primary aluminium output after years of breakneck expansion in the smelting sector. Excess aluminium production leaks out in the form of semi-manufactured products. Exports have grown from two million tons in 2010 to six million tons last year. The pace of growth has been too much even for the Chinese authorities, which have mandated a capacity cap of 45 million tons per year. That's cold comfort for Western aluminium producers, though, since Chinese operators are simply constructing more capacity in Indonesia. Indonesia now also accounts for around half of global nickel production thanks to a Chinese investment boom in both mine and processing capacity. The Sino-Indonesian supply surge has crushed the nickel price and forced over half a million tons of Western capacity to close since 2020, according to Macquarie Bank, which warns that there is now overcapacity at every stage of the processing chain. China's already strong hold on global supplies of industrial metals is only going to get tighter as more Western smelters succumb to the margin squeeze. China's own smelters are also feeling the margin pressure but many of the biggest players are vertically integrated, meaning losses at the processing stage can be offset further down the production chain. In addition, loss-making plants are given a helping hand by both central and provincial governments, a level of state subsidy that tilts the playing field against Western competitors. Western counterparts are also paying more for their power, a major cost for all smelters and particularly for aluminium plants which produce the light metal through electrolysis. It doesn't help that both existing operators and potential new plants must compete with the equally power-hungry tech sector for electricity. The European Union, which has seen multiple aluminium and zinc plants close since energy prices spiked after Russia's invasion of Ukraine in 2022, is prioritising faster grid access for energy-intensive sectors and promoting power purchase agreements as a way of alleviating costs. Whether the EU's "Action Plan" for its aluminium and steel processing capacity works remains to be seen. But it is a sign that Western policymakers have understood the lesson from China's recent flexing of its critical minerals muscles. China doesn't dominate global mining but rather the intermediate stage of the processing chain which converts ore into metal. The control is almost total in the case of exotic metals such as rare earth elements, and there is a growing threat of similar dominance in much larger base metal supply chains. Western smelters are strategic assets, not just for their key role in connecting the supply chain from mine to product, but also because of their by-product potential. China's export controls have spooked the gallium market, but the semiconductor metal can be recovered from the aluminium smelting process. Rio Tinto's Kennecott copper smelter in Utah is now also producing tellurium, another "hot" critical metal. Nyrstar could produce antimony, also subject to Chinese export controls, at its Port Pirie smelter in Australia, but only if the plant can continue operating. Its future now rests with the Australian government, which along with other Western governments must decide just how much it's prepared to pay to insulate its smelters from the Chinese price crush. The opinions expressed here are those of the author, a columnist for Reuters.
Bloomberg
03-07-2025
- Business
- Bloomberg
How to break China's mineral dominance, our solar panel podcast, Trump's big bill passes
Good morning, it's Angus here in Sydney. Here's what you need to know as you head into the weekend. Today's must-reads: • A test case for breaking China's grip on minerals • AustralianSuper tying up private equity deals • Our solar rooftop podcast The struggling Port Pirie smelter in South Australia could be a test case in how much Western governments are willing to spend to break China's dominance in critical minerals. Owner Nyrstar Australia is proposing a multimillion-dollar upgrade so the smelter can produce antimony — a key mineral used in munitions, semiconductors, solar panels and batteries. Read Paul-Alain Hunt's Dispatch here.
Sky News AU
02-07-2025
- Business
- Sky News AU
Nyrstar Australia asks for government handout as it loses 'tens of millions a month', struggles to compete against China
The CEO of a major Australian manufacturer has begged various state and federal governments for a handout as losses mount to "tens of million a month" while China allegedly distorts the market. Metal processor Nyrstar Australia has struggled with loss making ventures in South Australia and Tasmania while its old infrastructure puts it behind competing nations. The lead and zinc refiner's 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. 'Without decisive and targeted public policy support to address the imbalance in the global refining market and modernise infrastructure, Australia risks falling further behind in this critical minerals processing,' Mr Howell said on ABC RN. 'And worse, we may lose our existing sovereign refining capability in zinc and lead and of course once lost, our ability to rebuild our smelting infrastructure and workforce pipeline would be near impossible due to cost, time and skills lost.' The boss of Nyrstar, which employs more than 1400 people across Tasmania and South Australia, said government support would be critical as the company battles with China's 'distortion'. 'What we need to do is undertake a 22-month engineering feasibility study and while we do that we are operating in a heavily distorted market where we are losing tens of millions a month because of the actions of state actors,' Mr Howell said. 'That's why we believe it is right and proper for governments to provide transitionary support to protect these strategically important industries.' 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. A spokesperson for Industry Minister Tim Ayres said the government was looking into the challenges facing Nyrstar. 'We will maintain our focus on how best to secure our critical minerals and strategic materials supply, including the contribution of zinc and lead refining to production of valuable by-products,' the spokesperson said, per the Australian Financial Review.
ABC News
26-06-2025
- Business
- ABC News
Port Pirie and Hobart smelters need 'urgent' government help, owner says
The owner of the Port Pirie and Hobart smelters says its operations are losing tens of millions of dollars a month and need government help within "weeks" to stay afloat, casting a cloud over thousands of manufacturing jobs. Nyrstar Australia, which employs more than 1,400 people across Tasmania and South Australia, is lobbying the federal and South Australian governments to provide "transitionary support" for its smelting operations. The company says the Port Pirie lead smelter is losing tens of millions of dollars a month and will "simply not survive" in the current market, while its Hobart zinc smelter cannot operate independently of Port Pirie. Nyrstar Australia chief executive Matt Howell said government action was needed in "weeks, not months". "The business at Port Pirie is losing very considerable money — tens of millions a month — because of this distorted market, and it requires a response now," he told the ABC. "That's why we're quite buoyed by the nature of the conversations that we've had with the Commonwealth and state. "They recognise the seriousness, they recognise the urgency, and we're confident we'll get a solution." The renewed call for taxpayer help comes after Nyrstar's parent company Trafigura earlier this year placed its Australian smelting assets under review, describing them as "uncompetitive" entities that "shouldn't be in fully private hands". China has, according to Mr Howell, distorted the metals market by subsidising companies to purchase Australian raw materials at prices Australian smelters cannot afford. China then subsidises the processing of those materials into metals while also placing export controls over the finished product, he said. The issue has also put a cloud over the future of the Mount Isa copper smelter and Townsville copper refinery in Queensland. "We have been quite clear that business as usual under the current distorted market is not an option," Mr Howell said. "That's why this is a now problem. That's why it needs urgent government transitionary support. "This is not something where we can kick the can down the road into next year, the business will simply not survive in the current market environment. "Absent that market support, the business cannot be viable, and we all know what that means." Around 850 full-time workers are employed at the Port Pirie smelter, Mr Howell said, not accounting for hundreds more connected to the facility through contractors. The Hobart smelter employs around 600 people, not including contractors. The problems for Australia's smelting industry come only months after the South Australian government and the Commonwealth committed $2.4 billion to ensure the future of the financially troubled Whyalla steelworks. The state government regularly cited concerns about Australia's sovereign steelmaking capacity if the Whyalla steelworks closed. Mining giant Glencore made a pointed comparison to the $2.4 billion steelworks package in a pitch for federal government money for its Queensland copper assets. But SA Premier Peter Malinauskas said the smelter at Port Pirie is a "completely different asset" to the Whyalla steelworks with "completely different" circumstances. "We very much think that this country does require a sovereign smelting capability," he said. "That is a challenge that we're alive and we're in discussions with Trafigura about that at the moment." SA Energy and Mining Minister Tom Koutsantonis said it was not a Port Pirie issue but an "Australia smelter issue". "Smelters across the country are going through this because of the practices occurring in China, which is attempting to try an in-house this capability entirely in one country," he said. Mr Koutsantonis said he was in "regular contact" with federal Industry Minister Tim Ayres, who is "actively looking at this on behalf of the entire country". "This needs a national response," he said. The ABC contacted Mr Ayres for comment. Mr Howell said Nyrstar is willing to fund a $45 million feasibility study into redeveloping its Port Pirie smelter. The study will take 22 months to complete, and the company needs government support over that time, he added. "Over that period of time, absent any government support, the business would be losing many hundreds of millions of dollars because of the market distortion," he said. The Hobart zinc smelter also needs to be upgraded, he said. Mr Howell said Nyrstar was "looking for a hand up, not a handout", adding that company management has "tried everything that we can to restructure the business". "This is about investing in strategically important businesses that provide the necessities to modern life and for our strategic defence purposes."
