Six month delay to Port Pirie smelter redevelopment will lead to $70m annual windfall
IMPROVEMENTS to the redevelopment of Nyrstar’s Port Pirie smelter will add more than $70 million to the company’s bottom line annually despite planned works being pushed back by six months.
IMPROVEMENTS to the redevelopment of Nyrstar’s Port Pirie smelter will add more than $70 million to the company’s bottom line annually despite planned works being pushed back by six months.
In a market update yesterday, the Belgian company said a comprehensive review of the Port Pirie project identified engineering improvements that will unlock additional value.
The same review also identified that rework is required to the fabrication of key module components, delaying the start of hot commissioning by six months to September this year.
Enhancements to the slag tapping process on the top submerged lance furnace will also occur during this time.
The cost to complete the project is expected to increase from $563 million to $660 million.
“The Port Pirie redevelopment is a large, complex project which absolutely remains the right strategic decision for the company,” chief executive Hilmar Rode said.
“The revised furnace start-up date will not only ensure the successful completion of the project, but also deliver improved returns of approximately EUR 130 million ($182 million) per annum, compensating for the increased capital cost and more prudent ramp-up schedule.”
To further reduce ramp-up risk, Nyrstar intends to continue operating the existing sinter and acid plants in parallel with the ramp-up of the furnace and new acid plant.
The review found the uplift from the redevelopment will increase from the previous EBITDA ramp-up guidance of $112 million per annum to $182 million per annum from 2020.
luke.griffiths@news.com.au