Under the agreement, New Century will supply Nyrstar with 600,000 dry metric tonnes (dmt) of zinc concentrate from the tailings of its mine in Australia, which was closed in 2015 by its previous owner, China’s MMG (HKEX:1208).
In a joint statement, the companies reported that the terms of the deal include an allocation to Nyrstar of 250,000 dmt of zinc concentrate for the first 3.5 years and 350,000 dmt for the final two years of the offtake agreement. This represents approximately 15 percent and 35 percent, respectively, of the scheduled production.
Adding to the deal, Nyrstar is set to suspend arbitration proceedings that it launched against New Century earlier this month.
The Belgium-based business filed a request for arbitration concerning offtake rights for the Century zinc mine based on agreements between the parties dating back to 2007.
The move came after New Century awarded Switzerland-based Mercuria Energy Trading and Transamine Trading a tender for about 750,000 tonnes of zinc concentrate.
The settlement of the dispute remains subject to documentation of the formal offtake agreement, as well as confirmation that all historical agreements relating to the Century mine have been terminated.
When addressing the deal, Nyrstar Chief Executive Officer Hilmar Rode said, “Nyrstar has traditionally been a significant long term user of Century zinc concentrate. We are very pleased to have secured a new long-term supply agreement and are looking forward to continue our long standing successful relationship with the Century Zinc Mine and its new owners New Century Resources.”
On Tuesday (February 27), shares of New Century Resources closed down 1.39 percent in Sydney at AU$1.39.
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.