Half-yearly report shows rising costs for Nyrstar at its Port Pirie smelter
OPERATING costs at Nyrstar’s Port Pirie smelter have dramatically increased due to higher energy prices and unplanned maintenance outages.
OPERATING costs at Nyrstar’s Port Pirie smelter have dramatically increased due to higher energy prices and unplanned maintenance outages.
The Belgian-based company said in its half-yearly report that the direct cost per tonne increased by 40 per cent, from $903 to $1263, compared to the same period last year.
It attributed the rise to higher energy prices and unplanned maintenance outages, as well as lower production volumes.
In the six months to June, Nyrstar processed 84,000 tonnes of lead at the smelter, a decline of 12 per cent. The fall was blamed on a number of issues, including a 12-day blast furnace outage to repair leaking water jackets and a damaged fume hood.
The issues have now been largely resolved, the company said.
Furthermore, energy costs at Port Pirie increased by approximately $20.8 million due to higher coking coal prices.
The redevelopment of the Port Pirie smelter remains on schedule for hot commissioning by the end of September, with first feed of the new top submerged lance furnace commencing in October.
As reported in February, Nyrstar reaffirmed the cost of the redevelopment at $660 million, rather than the $563 million that was expected previously.
The revised figure followed a comprehensive review of the Port Pirie project which identified that rework was required to the fabrication of key module components, delaying the start of hot commissioning by six months.
“In H1 2017, the Port Pirie redevelopment has focused on completing the rework and enhancing the slag tapping arrangements on the TSL furnace while completing the modular construction and progressing the commissioning of the new infrastructure and related control systems,” the company said.
The review found the uplift from the redevelopment will increase from the previous EBITDA ramp-up guidance of $119 million per annum to $193 million per annum from 2020.
Nyrstar chief executive Hilmar Rode said delivery of the Port Pirie redevelopment and the ramp-up to design capacity remains one of the company’s strategic priorities.
“We have continued to progress our strategic initiatives in H1 2017, completing a review of our North American mining operations to identify their full potential and optimising the Port Pirie Redevelopment to accelerate and de-risk the project,” he said.
Nyrstar has drawn down $219 million of the South Australian Government’s finance facility, with another $73 million available.
luke.griffiths@news.com.au