Safework SA investigating Port Pirie smelter ‘incident’; second unplanned shutdown this year
Port Pirie’s lead smelter may have a new owner, but problems persist with the facility being shut down again following an ‘incident’ only days after recovering from a previous unplanned stoppage.
Port Pirie’s lead smelter is in the midst of its second unplanned shutdown this year following an ‘incident’, days after recovering from a previous unplanned stoppage.
The zinc-lead smelter furnace will be “down for a number of weeks”, the Belgium-based Nyrstar, which is in the process of handing over control to its saviour and shareholder, commodity trading firm Trafigura, told news agency Reuters.
“ … A number of options are being considered including a restart of the sinter plant to maintain production,” the company said.
SafeWork SA said it is investigating a weekend incident at Nyrstar in which molten material and gas escaped from a large furnace.
The MFS also attended the scene.
“The furnace and materials are cooling and our investigation is ongoing. SafeWork SA will be attending the site again next week for compliance and further investigation purposes.”
The news of another unplanned shutdown from the global major producer resulted in lead prices touching a two-week high overnight due to fears of shortages of the metal mainly used in car batteries.
Benchmark lead on the London Metal Exchange (LME) touched its highest since July 26 at $US2,101.50 per tonne but closed 0.2 per cent lower at $US2,065.
The Port Pirie smelter operation produced 160,000 tonnes of lead metal last year.
Nyrstar had quantified the impact of the first outage during June and July 2019 as approximately 30,000 tonnes of lost lead metal and a reduction in underlying earnings before tax of approximately €20 million — €25 million in the same period.
The second shutdown will likely add to that impact.
Port Pirie’s previous unplanned shutdown of its TSL and blast furnaces lasted from May 28 to 18th July when the TSL furnace resumed operations.
The blast furnace was due to start operating at the end of July — and that restart seems to have triggered the latest incident which involved gas and metal escaping from the furnace, according to SafeWork SA.
The shutdowns follow a $600 million capital upgrade of the metal processing plant completed in 2018 — backed by a $291 million debt guarantee from the State Government.
Former premier Jay Weatherill signed off on the taxpayer guarantee for the smelter’s rebuild as part of a deal with Frome MP Geoff Brock in 2014 which secured a minority Labor state government.
Following the first shutdown, Mr Brock told The Advertiser the plant was going through “teething problems”.
“This sort of a ramp up needs three to four years … they are doing it in 18 months,” he said.
Trafigura has guaranteed it will pay off a $291 million State Government guaranteed loan by November 2022. The initial payment of $58 million will be paid in November with the additional seven payments of $29.125 million coming every six months.
“There is uncertainty on when the smelter will be back up and running on a reliable basis and this should support prices,” said Capital Economics Senior Commodities Economist Ross Strachan said.
“But it’s still fairly gloomy on the economic background with the trade war,” Strachan said, adding this could cap gains in base metals.
The plant’s 700 workers remained on site during the last shutdown working on forward maintenance work. The Advertiser has sought comment on the current arrangements.