Nyrstar to make $43m payment towards State Government’s $291.25m loan

State Treasurer Rob Lucas has welcomed Nyrstar’s commitment to make its first repayment towards its Port Pirie lead smelter redevelopment, but warned “it was too early in discussions to lock in a guaranteed payment plan”.

• Trafigura to take over Nyrstar
• $900 million bailout for Nyrstar
• Nyrstar at risk of defaulting on its $290m debt
• Nyrstar misses first loan payment

Nyrstar will make a $43 million repayment towards its Port Pirie lead smelter redevelopment by the end of the month, reducing the financial risk to SA taxpayers.

The payment — consisting of $29 million towards the principal debt and a $14 million interest-type payment — is the first towards a $291 million loan guaranteed by the State Government.

Nyrstar has previously failed to meet three payment deadlines.

Treasurer Rob Lucas on Wednesday announced the proposed payment, following a meeting with Nyrstar’s biggest shareholder Trafigura, which has made a bid to take over the company.

“This is certainly a positive development and one that the Government welcomes on behalf of the taxpayer,” he said.

Mr Lucas welcomed the payment as a “sign of good faith” as the Government continued its debt discussions with Nyrstar and, potentially Trafigura, in the near future.

However, he said it was too early in discussions to lock in a guaranteed payment plan going forward, as Trafigura would not take control of Nyrstar until June or July at the earliest.

Nyrstar CEO Hilmar Rode, vice president of its Australian operations Mark Zaborowski and lobbyist Ian Smith arrive to meet Treasurer Rob Lucas in November last year.

SA Treasurer Rob Lucas

The Government’s agreement with Nyrstar gives it a veto for any “change of control” of the company.

Nyrstar’s first debt payment could be seen as a move to secure the Government’s support for the change of ownership, given Mr Lucas has continually stressed the importance of reducing South Australian taxpayers’ exposure.

Mr Lucas said Trafigura’s Asian pacific chief financial officer Nicolas Marsac had again stressed the importance of the Port Pirie operation during a meeting on Wednesday.

“They were at pains to reinforce the fact that should they be successful in becoming the new owners of Nyrstar that Port Pirie is an important element of their global operations,” he said.

Labor treasury spokesman Stephen Mullighan said the payment was great news for Port Pirie and the lead smelter employees.

“It shows that the chest thumping and legal threats by Rob Lucas last year were both unhelpful and unnecessary,” he said.