The South Australian government has used its leverage to force Belgian metals group Nystrar to pay back its first instalment of a $291 million loan made to help rebuild the Port Pirie silver, lead and zinc smelter.
Treasurer Rob Lucas used his power to approve or veto a takeover of Nystar to negotiate the making of its first repayment of principal and interest this month.
He said: “They will make a payment this month of $42.3 million.”
As reported in @AuManufacturing, Nystar’s share price slumped on poor zinc prices, and a massive $660 million plant upgrade at Port Pirie.
The technology upgrade resulted in the loss of 160 jobs, while the sharemarket turmoil caused Nystar to miss its first $30 million repayment to the government.
The payment is made up of $29 million against the principal with the remainder covering interest outstanding.
Lucas said he saw the payment as a sign of good faith by the company, which is set to be taken over in a restructure by its largest shareholder, Trafigura.
Trafigura needed Lucas’s approval before the takeover under the terms of the loan which was negotiated by the previous Labour government.
Lucas said: “This is certainly a positive development and one that the Government welcomes on behalf of the taxpayer.
“The Government remains hopeful of a successful resolution, not only for taxpayers, but for the people of Port Pirie, the smelter’s employees and their families.”
The smelter is one of the world’s largest and was originally set up to process ore from BHP’s Broken Hill mines.
The latest upgrade allows it to process a wider range of metals, including the recovery of zinc from ore stockpiled at Nystar’s smelter in Tasmania.
Picture: Nystar Port Pirie
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