Port Pirie lead smelter Nyrstar taking court action against local council over new tax

The owner of Port Pirie’s lead smelter is taking court action against the local council, aiming to torpedo a new tax that’s aimed solely at the company and produced a million-dollar rates bill.

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The owner of Port Pirie’s lead smelter is taking court action against the local council, aiming to torpedo a new tax that’s aimed solely at the company and produced a million-dollar rates bill.

Nyrstar, the town’s largest employer, is already under increasing financial pressure as large debt repayments loom. The uncertainty around the company’s future has added to a lack of business confidence in the town.

Port Pirie Council has introduced a special new rates category of “industrial — other (Nyrstar)”, which is about 10 times more expensive than that applied to residential homes.

The council expects to get about 8 per cent of all its rates revenue from Nyrstar.

Nyrstar, Port Pirie’s largest employer, is already under increasing financial pressure as large debt repayments loom.

Documents filed in the District Court and sighted by The Advertiser show that when the new regime came into force last year, Nyrstar’s eight properties were hit with a combined $1.34 million bill.

HWL Ebsworth Lawyers, acting for Nyrstar, is seeking costs from the council and demanding that the specially-tailored tax be axed as it has no foundation in law.

The documents were filed with the court in November, but only served to the council recently.

The papers state that Nyrstar has made payment on the first quarter’s dues, while also objecting.

Councils often set different rates for residential, commercial or farming properties but Nyrstar says the creation of a special “industrial — other (Nyrstar)” levy is “without legal basis”.

“The council has no legal basis or right pursuant to the Act or otherwise to use the invalid differentiating factor to determine or declare the Nyrstar rate,” the statement of claim says.

“The Nyrstar rate was thereby unlawful, invalid and ultra vires (beyond authority).”

The council declined to comment yesterday, as the matter is before the courts.

However, the issue is expected to be raised at a council meeting on Wednesday night.

Treasurer Rob Lucas has warned of a $291 million budget hit if Nyrstar were to collapse.

Council documents state that the special regime for Nyrstar was introduced because of the “unique nature of these properties, and a degree of subjectivity as to their capital values”.

It is not clear how much the company previously paid in annual rates charges.

A Nyrstar spokesman said: “It is Nyrstar’s preference to resolve this matter in discussion with the council, without needing to take steps to prosecute the proceedings.”

Nyrstar’s global operations are facing significant financial pressure and the company last month revealed the smelter was set to make $72.7 million less than originally forecast in its first two years of operation, as its earnings target is revised to $148 million.

The company attributed the drop in forecast profit to variables including metal prices, exchange rates and operating performance.

It said the new furnace had “ramped up successfully” since its rebuild and volumes of lead put through it would grow again in 2019.

State taxpayers underwrote the redevelopment as part of the 2014 deal between former premier Jay Weatherill and local independent MP Geoff Brock to form minority government.

Mr Brock believed people still had confidence in the plant itself, but “like a lot of smaller country towns, we’re feeling the strain because our economy isn’t booming”.

Treasurer Rob Lucas has warned of a $291 million budget hit if Nyrstar were to collapse.