Australian Workers’ Union Tasmania secretary Robert Flanagan warns future of Nyrstar Hobart zinc works ‘uncertain’

After Nyrstar announced that it would be reducing production at the Hobart zinc works, a powerful trade union has warned that the future of the iconic smelter is under a cloud.

Todd Milne, general manager of Nyrstar Hobart, has announced a significant scaling back of production at the century-old zinc works in the Northern Suburbs. Picture: Nikki Davis-Jones

The long-term future of the Hobart zinc smelter and its workforce will remain uncertain until the century-old plant is upgraded, Australian Workers’ Union Tasmania secretary Robert Flanagan has warned.

On Wednesday, Nyrstar informed its more than 500 staff at the Lutana facility that it would be reducing production by 25 per cent from April due to unfavourable market conditions.

Nyrstar Hobart general manager Todd Milne has assured workers that no “immediate” job cuts were planned as a result of the decision.

Nyrstar zinc smelter in Hobart. Picture: Supplied

It comes after the company put its proposed $400m electrolytic cell house development on hold because the cost had blown out by $100m.

Nyrstar’s multinational parent company, Trafigura, also wrote down the value of its Hobart and Port Pirie smelters by a combined sum of more than half-a-billion US dollars over the last two years, citing the plants’ underperformance “against budget”.

Australian Workers’ Union Tasmania secretary Robert Flanagan said it was positive that no jobs would be lost as production was scaled back at the Hobart zinc works but he expressed concern about the future of the smelter.

AWU Acting Tasmanian Branch Secretary Robert Flanagan. Picture: Chris Kidd

“That cell house investment is critical for the long-term,” he said.

“The steps we’ve seen [so far] are not steps which give us a lot of confidence in the long-term. We’re hoping that the management can get the smelter on a viable footing so that the owner is prepared to invest in the cell house.

“That is the key to the long-term presence of the smelter. Until that decision is made, there really is no long-term certainty.”

Deputy Premier Guy Barnett said the state government was “in discussions” with Nyrstar about any “practical and supportive measures” that could be provided to ensure the smelter could “operate effectively into the future”.

“Obviously, this is a concern,” he said.

“We’re backing [Nyrstar] in. We are monitoring the situation and working with Nyrstar and will continue to do so in a positive way.”

Treasurer Guy Barnett. 2025.

Mr Barnett did not rule out the possibility of the government providing financial support in order to prop up the smelter.

“We’ve had ongoing liaison and contact with [Nyrstar] and will continue to do so,” he said.

Independent Clark MP Andrew Wilkie said Nyrstar’s woes would be “unsettling for many in the community” and that he would be seeking to discuss the situation with both the company and the federal government.

“While ultimately the situation is a consequence of global economic conditions and the consequent business decisions of a private enterprise, governments still have a role to play to ensure that the regulatory framework and any financial assistance is as supportive as possible,” he said.

Blow for major Tassie employer as production to be cut back

Nyrstar will reduce production at its Hobart zinc smelter by 25 per cent in the face of faltering market conditions but the company has vowed that no jobs will be lost in the “immediate” future.

One of Tasmania’s four major industrial businesses, Nyrstar is grappling with significant financial pressures, including increased overhead costs and deteriorating conditions in raw material markets and treatment charges.

The Netherlands-headquartered company’s Lutana zinc works opened in 1918 and currently employs more than 500 people. It is among the state’s largest private sector employers, energy users, and exporters.

Nyrstar Hobart general manager Todd Milne informed staff of the change in business strategy on Wednesday, following a review of the plant’s operations.

It’s not yet clear how long the scale-back of production will last, with Mr Milne saying this would depend on the state of the market into the future, as well as operating conditions.

“Nyrstar Australia plays an important role in maximising the value of Australian metals and minerals. We remain optimistic about the future and have the flexibility to lift production levels when operating conditions improve,” he said.

According to the company, no “immediate” job cuts were planned as a result of the decision.

The change will be implemented in stages from April.

Todd Milne, Nyrstar Hobart general manager. Picture: Richard Jupe

It comes after the company put a planned $400m modernisation of its electrolytic cell house on hold in August due to projected costs blowing out by $100m.

The project had garnered significant support from both the federal and state governments, which committed $50m and $20m to the cell house development, respectively.

The Hobart zinc works is one of only two zinc refineries in Australia and provides a significant amount of zinc to the South-East Asian market.

Nyrstar has written down the value of its Hobart and Port Pirie smelters by a combined sum of more than half-a-billion US dollars over the last two years.

Aerial shot of Nyrstar Hobart zinc works at Lutana. Picture: Supplied

Its parent company, Trafigura, detailed the decision in its full-year financial report in 2024, noting that the Hobart smelter and the multi-metals recovery plant at Port Pirie had “faced continuing challenges” in the previous financial year, which resulted in a “revision of the business plans and a consequential revision of the assumed recoverable value of the Australian cash-generating unit”.

“Both sites have underperformed against budget which was considered as an indication for a potential impairment,” the report said.

Trafigura recorded revenue of $US243.2bn in 2023-24 and its net profit dropped from $US7.3bn in the previous year to $US2.8bn.

Originally published as Australian Workers’ Union Tasmania secretary Robert Flanagan warns future of Nyrstar Hobart zinc works ‘uncertain’