Federal, SA, Tas governments pledge $135 million to save Nyrstar’s struggling smelters, explore critical mineral diversification 

The federal, South Australian and Tasmanian governments have committed $57.5 million, $55 million and $22.5 million respectively to support the modernisation of Nyrstar’s Australian refining facilities and move them towards critical minerals production.

According to a joint statement from industry minister Tim Ayres and the two states’ premiers on Tuesday, combined government support of $135 million will be coupled with an unspecified amount of investment from Nyrstar, which is owned by multinational commodities firm Trafigura.

The investment will see the Port Pirie and Hobart smelters keep operating “while progressing detailed engineering plans to potentially rebuild and modernise both smelters and, at the same time, fast track feasibility studies into world-leading critical metals production.”

An “immediate focus” of the rescue plan is a pilot plant at Port Pirie for antimony, not currently made in Australia and with uses including in alloys and semiconductors.

Studies will also examine production of other critical minerals including bismuth at Port Pirie and germanium and indium at Hobart.

“If pilot studies are successful this would position Port Pirie as Australia’s only producer of antimony metal and one of the few globally, supporting sovereign capability in defence and advanced manufacturing,” said Ayres. 

The opposition was critical of the bailout, with industry spokesman Alex Hawke saying it ignored “deeper challenges with Australian industry.

“High energy costs and stifling regulation must be addressed to improve productivity and boost competitiveness.”

Nyrstar has been lobbying for support this year, citing its economic and employment value – employing 1,400 Australians directly and supporting over 6,600 indirect jobs – as well as market distortions created by China.

It commissioned a report by Mandala published in May on the importance of existing skills, infrastructure, and supply chains underpinning mineral processing, and the “national interest, not just economically, but strategically” attached to retaining production of lead and zinc.

 CEO Matt Howell told the ABC in June that, “The business at Port Pirie is losing very considerable money — tens of millions a month — because of this distorted market, and it requires a response now”

The Australian Workers' Union welcomed the rescue package as a relief, saying the loss of Nyrstar's sites would have been “a national catastrophe.”

AWU National Secretary Paul Farrow said: “China is spending more on propping up its manufacturing sector than it spends on defence. Either we let them undercut our operations into oblivion, or we step up with a strategic national approach.

“We need to develop a long-term, national strategy to retain our smelters so they can thrive in the future when we get our act together on energy costs.”

Picture: the Nyrstar zinc works at Hobart (credit Gary Houston, CC0)

Editor's note: article was edited to add comment from Alex Hawke

Further reading

Nyrstar warns of ‘urgent, serious’ risk of smelter closure

Losing lead and zinc means losing critical mineral export potential, says new Nyrstar-commissioned report

Nyrstar puts its Australian economic value creation in 2022 at $1.7 billion 

Federal budget to include $50 million in support for Nyrstar’s Hobart Zinc Works

Think tank warns China’s industrial subsidies threaten 73,000 Australian smelting jobs