$135m government funded rescue plan announced for Port Pirie smelter
Workers at the struggling smelter have rejoiced at news their jobs are now safe, after a multimillion-dollar state and federal government rescue package was unveiled.
A $135m rescue plan for Port Pirie’s embattled smelter has been unveiled, as governments pump in cash to stave off an existential challenge from aggressive Chinese market disruption.
Premier Peter Malinauskas and federal Industry Minister Tim Ayres on Tuesday morning announced the state and federal investment package to cover Nyrstar’s Port Pirie multi-metal smelter and Hobart’s zinc refinery, which together employ about 1350 people.
A relieved Port Pirie Regional Council Mayor Leon Stephens spoke for the community in expressing his relief saying a community in limbo could get back to investing and feeling hopeful for its economic future.
“Happy days,” he said.
Nyrstar said it had reached agreement with the federal, South Australian and Tasmanian governments for “$135m transitionary support for its domestic multi-metals manufacturing business and sites at Port Pirie and Hobart”.
This comprised $57.5m in federal money, $55m from SA, and $22.5m from Tasmania.
The funds mean Nyrstar can “maintain its ongoing operations, while progressing engineering planning to allow assessment of a significant rebuild of its Australian smelters and, at the same time, fast-track feasibility studies into critical metals production”.
Building an Antimony Pilot Plant at Port Pirie to make the city the only producer of this valuable metal was a key immediate focus as the package shores up 909 smelter jobs.
Antimony is highly sought after by defence industries around the world to make ammunition and it also was used in electronics to make solar panels and as a flame retardant.
“We have an opportunity to transform the Port Pirie smelter and secure its future for the long term,” Mr Malinauskas said.
“Working with Nyrstar and the Commonwealth, we can modernise the Port Pirie smelter and take advantage of the world’s desire for critical minerals.”
Nyrstar said the first stage of support would lead to “major investment” on site that would create work for an extra 350 contractors and 90 suppliers at Port Pirie.
In a statement, Nyrstar global chief executive officer Guido Janssen said: “In the face of extremely challenging global market conditions, this support demonstrates the strategic importance of the Australian operations for sovereign capability and delivering the products needed globally for modern economies.”
Nyrstar had previously asked for $45m in government funds, as a “hand up, not a hand-out”, to help plans to retrofit the 135-year-old Port Pirie smelter to produce critical metals used in defence, renewables and other emerging industries.
The package was designed to deliver long-term sustainability for the Port Pirie smelter, by investing in the plant without taking an ownership stake rather than merely handing over money as a bailout.
Nyrstar Australia chief executive officer Matt Howell said Port Pirie would now “embark on a new journey” as it pivoted to critical minerals.
“If Australia wants to be a nation that makes things we have to invest,” he said.
At a community forum in Port Pirie on Monday night, Mr Malinauskas said “we’re all in and we have been working our guts out over the last couple of months” to negotiate a support package.
He was at dinner with representatives from Trafigura, the parent company of Nyrstar, Monday night and “we have been in last minute negotiations today to try and land that as we would very much like to make a decision on this”.
The Advertiser on Monday revealed a state/federal funding plan for the Port Pirie smelter, which employs 800 people, would be unveiled within days.
A McKell Institute report warned a Port Pirie smelter closure would decimate the city and blamed “aggressive geo-economic interference” by China for threatening the future of Australia’s smelting and metal-refining regions.
It is understood Senator Ayres will host a metals and mineral processing industry roundtable in Sydney on Thursday, attended by key firms including Nyrstar.
Nyrstar has been in last-ditch talks with state and federal governments since at least June over the Port Pirie smelter, which it has said was bleeding millions of dollars a month in a losing battle with Chinese rivals.
Mr Malinauskas said earlier this week that one question was always top of mind during deliberations and “that was, what is the cost of doing nothing?”.
If the smelter was closed in Port Pirie or the Whyalla steelworks that was “thousands of people out of work who are not paying income tax and going to Centrelink instead”.
He said he met with Senator Ayres recently about a national smelting strategy adding that “we accept Nyrstar is facing challenges not of its own making” and the same challenges were occurring nationally.
Opposition Leader Vincent Tarzia welcomed the support package but said serious questions remained about the long-term viability of doing business in SA, because of rising operational costs including energy.
“We support saving vital industries and the jobs that come with them, but this can’t just be a short-term political fix,” he said.
“South Australians need confidence that this money is being spent responsibly, with long-term outcomes in mind because continual bailouts are financially unsustainable.
“We acknowledge that global competition is a significant factor but what’s also of critical importance is having a clear, credible energy plan to bring down record-high power bills.”
Federal Liberal MP Tony Pasin, whose seat of Barker includes about one-third of the nation’s vineyards, said growers’ plight was being ignored in a double standard from state and federal governments.
“It seems the answer to every industrial challenge in this state is a taxpayer-funded cheque—unless, of course, you’re a wine grape grower,” he said.
“Labor will open up the treasury chequebook for unionised workforces working in Port Pirie and Whyalla, but when it comes to struggling grape growers employing thousands in regional communities—they’re simply ignored.”
Smelter workers rejoice at investment
Fourth-generation Port Pirie worker Christan Wood is part of a proud local history – his grandfather worked at the local smelter for 45 years and his father put in a 46-year innings.
“I’ve been there 28 years so far,” Wood says, telling how his family heritage is so deeply entrenched in the city it stretches back to his great, great grandfather William Wood being Port Pirie’s second Mayor.
This proud lineage added another layer of anxiety in past months to the Hazell Bros site manager who oversees 78 full time and 38 casual employees handling raw materials for Nyrstar at the Port Pirie site.
“The smelter feels like a community especially in my environment, we are a family owned business and we rate it as such, I have family members working for me, my Dad actually worked for me before he retired,” Mr Wood says.
“Everyone is so relieved. Mum is probably the most outspoken about being pro-Port Pirie, she’s seen all the changes over the years and when the new owners came they backed the smelter, I think she’ll just say “I told you so” about the announcement.”
Mr Wood is among thousands of residents feeling a deep sense of relief that help has arrived for the 135-year-old smelter with new investment also expected to create 350 jobs for contractors and 90 suppliers at Port Pirie.
Standing among dozens of workers listening to the announcement on Tuesday morning that the state and federal governments were stepping in with a $135m package to support and transform the Port Pirie and Hobart Nyrstar sites, was Mathias Aakyirr.
The metallurgist moved to Port Pirie with his wife who works in aged care and 17-month-old son more than two years ago after Mr Aakyirr finished his degree at the University of South Australia.
“There’s a lot of relief, we were on the edge and not sure how things would go,” he said.
“I am quite happy today … this is a unique plant, if you lose the plant you lose more.”
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