Nyrstar Australia, which owns smelters in Port Pirie and Hobart, says it needs taxpayer support within “weeks” to stay afloat as it is losing tens of millions of dollars a month due to “market distortion” from China.
The real issue is the smelter plant is old and needs significant upgrading, which Nyrstar has so far refused to do.
Nyrstar Australia employs more than 1,400 people across Tasmania and South Australia.
Around 850 full-time workers are employed at the Port Pirie smelter, not including hundreds more connected to the facility through contractors.
“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 CEO Howell told ABC.
If it’s losing that much, instead of bailing it out using taxpayers money, a buyer needs to be found.
The state government should put in place emergency training for workers at the smelter, if and when it goes belly up. It should also check Nyrstar has enough funds to payout entitlements.
The renewed call for taxpayer help comes after Nyrstar’s parent company Trafigura earlier this year placed its Australian smelting assets under review, describing them as “uncompetitive” entities that “shouldn’t be in fully private hands”.
The problems for Australia’s smelting industry come only months after the South Australian government and the Commonwealth committed $2.4 billion to ensure the future of the financially troubled Whyalla steelworks.
This is why Nyrstar has put its hand out.
SA Premier Peter Malinauskas said the smelter at Port Pirie is a “completely different asset” to the Whyalla steelworks with “completely different” circumstances.
Mr Howell said Nyrstar is willing to fund a $45 million feasibility study into redeveloping its Port Pirie smelter. The study will take 22 months to complete, and the company needs government support over that time, he added.
Mr Howell said Nyrstar was “looking for a hand up, not a handout”, adding that company management has “tried everything that we can to restructure the business”.
Nyrstar is looking for the taxpayer to foot the bill if the review finds the plant is not feasible.