• Connect with us
    • Information
      • About Us
      • Contact Us
      • Careers
      • Partnerships
      • Advertise With Us
      • Authors
      • Browse Topics
      • Events
      • Disclaimer
      • Privacy Policy
    • NORTH AMERICA EDITION
      Australia
      North America
      World
    Login
    Investing News NetworkYour trusted source for investing success
    • NORTH AMERICA EDITION
      North America
      Australia
      World
    • My INN
    Videos
    Companies
    Press Releases
    Private Placements
    SUBSCRIBE
    • Reports & Guides
      • Market Outlook Reports
      • Investing Guides
    • Button
    Resource
    • Precious Metals
    • Battery Metals
    • Base Metals
    • Energy
    • Critical Metals
    Tech
    Life Science
    Base Metals Market
    Base Metals News
    Base Metals Stocks
    • Base Metals Market
    • Base Metals News
    • Base Metals Stocks
    zinc investing

    Nyrstar Shareholders Launch Lawsuit Against Trafigura

    Olivia Da Silva
    Sep. 09, 2019 04:50PM PST
    Base Metals Investing
    EBR:NYR

    After years of financial struggles, Nyrstar shareholders are allegedly pointing the blame at major stakeholder Trafigura Group.

    After years of financial struggles, Nyrstar (OTC Pink:NYRSY,EBR:NYR) shareholders are allegedly pointing the blame at major stakeholder Trafigura Group.

    Nyrstar, one of the world’s largest zinc refiners, has been rattled with financial and operational issues for some time now. In April, the company announced that Trafigura would be taking control of the smelter in an attempt to save it from bankruptcy.

    The lockup deal laid out interim funding agreements, which would restructure the company’s balance sheet and make Trafigura the majority owner.

    However, a handful of Nyrstar’s non-Trafigura shareholders have reportedly launched a lawsuit against the company, claiming Trafigura used its influence to negotiate lopsided contracts. The lawsuit alleges that these deals have caused Nyrstar to lose significant funds since 2016, contributing to its current dire financial state.

    While a spokeswoman from Trafigura declined to comment on the matter, a lawyer representing Nyrstar downplayed the accusations.

    “Nyrstar has defended itself in open court against the unsubstantiated allegations made by a small group of shareholders,” Benoit Allemeersch told Bloomberg. “These claims are nothing new and entirely incorrect.”

    Despite Nyrstar’s lawyer shrugging off the claims, documents involved in the case — including contracts between Nyrstar and Trafigura — tell a different story.

    According to Laurent Arnauts, the lawyer representing approximately 100 Nyrstar shareholders, “(These contracts) confirmed our main suspicion, which was that Trafigura was in a position to exploit or make an abuse of its economic control.”

    The shareholders launching the lawsuit claim that Trafigura used its influence on Nyrstar senior executives to enter unfavorable commercial agreements. These included heavy commercial discounts given to Trafigura, the second-largest metals and oil trader.

    An analysis by Kris Vansanten, a shareholder and founder of Quanteus Group, claimed that a concentrate supply deal between the companies saw Nyrstar accept processing fees much below standard industry rates.

    Quanteus’ analysis painted a stark picture, stating that 2018 industry benchmarks laid out smelter treatment charges of US$147 per tonne of processed ore. However, the rate in Trafigura’s contract with Nyrstar was only US$24 per tonne.

    Other components of contracts between the two companies also showed favoritism towards Trafigura, such as clauses that allowed the company to withhold large amounts of metal from Nyrstar.

    For the time being, Arnauts said that the Nyrstar shareholder group won a court decision to postpone a vote on the company’s accounts. Going forward, they are planning to pursue damages; however, Allemeersch said the Belgian court dismissed other claims from the group.

    “If further claims are filed, we’ll fully and forcefully defend them in court,” Allemeersch said.

    As of August 29, Nyrstar shares rested at US$0.10.

    Don’t forget to follow us @INN_Resource for real-time updates!

    Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.

    zinc investingotc:nyrsyebr:nyr
    The Conversation (0)

    Go Deeper

    AI Powered
    Critical Minerals Market Expected to Reach $586 Billion by 2032 as Demand Grows for Supply of Essential Minerals

    Critical Minerals Market Expected to Reach $586 Billion by 2032 as Demand Grows for Supply of Essential Minerals

    Critical Minerals Market Expected to Reach $586 Billion by 2032 as Demand Grows for Supply of Essential Minerals

    Critical Minerals Market Expected to Reach $586 Billion by 2032 as Demand Grows for Supply of Essential Minerals

    Latest News

    AuKing to Acquire 100% of Cloncurry Gold Project

    Silver47 Exploration - OTC Markets Request

    Vertex Minerals Limited Corporate Presentation Mining Forum Americas

    Nine Mile samples up to 18.27% Cu at Wedge

    Empire Metals Limited Announces Appointment of Marketing Manager

    More News

    Outlook Reports

    Resource
    • Precious Metals
      • Gold
      • Silver
    • Battery Metals
      • Lithium
      • Cobalt
      • Graphite
    • Energy
      • Uranium
      • Oil and Gas
    • Base Metals
      • Copper
      • Nickel
      • Zinc
    • Critical Metals
      • Rare Earths
    • Industrial Metals
    • Agriculture
    Tech
      • Artificial Intelligence
      • Cybersecurity
      • Gaming
      • Cleantech
      • Emerging Tech
    Life Science
      • Biotech
      • Cannabis
      • Psychedelics
      • Pharmaceuticals

    Featured Base Metals Investing Stocks

    Group Eleven Resources

    ZNG:CC

    Nuvau Minerals

    NMC:CC
    More featured stocks

    Browse Companies

    Resource
    • Precious Metals
    • Battery Metals
    • Energy
    • Base Metals
    • Critical Metals
    Tech
    Life Science
    MARKETS
    COMMODITIES
    CURRENCIES