Private metals smelter Nyrstar will receive a $135 million tax payer funded stop-gap package from the federal, SA and Tasmanian governments.
The company says the funding will help it “maintain its ongoing operations” in Port Pirie and Hobart while working on engineering planning to rebuild infrastructure.
According to Nyrstar, the company employs 1,400 direct workers in Australia and supports 6,600 indirect jobs.
The SA government and the company blames “market distortion” from China for its problems but Nyrstar has been struggling for ten years. It’s business model is failing and it doesn’t have the money to convert its plants to produce new metals.
As part of the $135 million, the federal government will contribute $57.5 million, with $55 million and $22.5 million to come from the SA and Tasmanian governments respectively.
The federal government said the money would be spent on feasibility studies into “critical metals production” at Nyrstar, which is looking to expand production to antimony and bismuth at Port Pirie and germanium and indium at Hobart.
Part of that involves the creation of a pilot plant at Port Pirie for the production of antimony — a metal used in munitions and electronics.
“The fact that this site can produce 40 per cent of all the antimony required by the United States for critical tasks such as the hardening of bullets demonstrates the vitalness of these sites … and the absolute importance of Pirie and Hobart,” Trafigura CEO Richard Holtum said.
“What these two industrial sites produce … is absolutely critical to both the national security and the renewable industry, and infrastructure build-out for Australia and the western world. Through this investment we are making sure that these facilities are going to be here for the foreseeable future.”
Federal Industry Minister Tim Ayres said the funding would underpin “the first phase of a two-year feasibility study” into the expansion of metals production.
SA Premier Peter Malinauskas said the support package was “about setting Pirie up for a more prosperous future”.
Nyrstar Australia CEO Matt Howell told the ABC in June that its Port Pirie operation was losing tens of millions of dollars a month and needed government help within “weeks, not months”.
The company also said at the time that its Hobart zinc smelter could not operate independently of Port Pirie if the latter were to go under.
In March, Nyrstar’s global parent company, Trafigura, said its Australian operations were “uneconomical”, with Trafigura’s CEO describing Nyrstar Australia as an “uncompetitive asset” that “shouldn’t be in fully private hands”.