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In another tricky situation, Nyrstar has allegedly halted production at its Port Pirie lead smelter and declared force majeure.
Nyrstar (OTC Pink:NYRSY,EBR:NYR) is in another tricky situation, and has allegedly halted production at its Port Pirie lead smelter and declared force majeure.
According to Reuters, the European zinc smelter stopped output at Port Pirie, located in South Australia, in late May, due to an unplanned outage at its blast furnace.
“We are currently in the process of assessing the outage and expect that production should resume within the coming days. There will be a negative impact to Nyrstar’s lead metal production due to the outage,” a company spokesperson told Reuters.
The asset produced 160,000 tonnes of lead in 2018, a 7 percent drop from the year before, which the company attributed to a planned 38 day blast furnace maintenance outage and a shutdown of the blast furnace later that year.
Port Pirie, an integrated multi-metal recovery plant, is one of the largest primary lead smelting facilities in the world and is the third largest silver producer, according to Nyrstar. The company has been working on a redevelopment project surrounding the asset, which involves converting Pirie’s operations into an “advanced metal recovery and refining facility.”
The conversion process entails replacing the existing sinter plant with an oxygen-enriched bath smelting furnace and replacing the existing sulfuric acid plant with a new plant that hosts a larger capacity and upgraded technology.
Nyrstar is still in the ramp-up process of Port Pirie’s redevelopment, with a 2018 full-year report from the company marking the project’s total price tag at AU$714 million.
The company has been in financial hot water for the last several months as it has relied on shareholder funding to help dodge the bankruptcy bullet. In April, major shareholder Trafigura Group announced it would be taking control of the company through a lockup deal that entailed interim funding arrangements to keep Nyrstar’s operations ongoing.
The deal saw Nyrstar receive US$250 million in secured bridge financing, a boost the company gained just months after Trafigura provided a US$650 million working capital facility to help Nyrstar’s liquidity.
As of Wednesday (June 5), lead was trading at US$1,880.50 per tonne on the London Metal Exchange.
In Brussels, Nyrstar shares closed 2.14 percent lower on Thursday (June 6), hitting 0.19 euros.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.