Zinc Giant Nyrstar Sees Strong Growth in Mines-Shanghai Metals Market

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Zinc Giant Nyrstar Sees Strong Growth in Mines

Industry News 08:52:49AM Mar 08, 2010 Source:SMM

BRUSSELS, Mar. 8 -- Belgium's Nyrstar (NYR.BR: Quote), the world's biggest zinc producer, aims to increase production of the metal from its own mines to about 30 percent over the next year from 21 percent, its chief executive said on Friday.

The company's drive to expand into mining, which offers higher margins than its traditional smelting operations, has so far resulted in Nyrstar acquiring mines or buying stakes in them in the United States, Greenland and Peru.

It has also reached an agreement to buy zinc concentrate from Finnish group Talvivaara (TALV.L: Quote) in a multi-year deal.

"The profitability of mines is much higher than for smelters," Chief Executive Roland Junck told reporters.

Becoming integrated by 30 percent is "our aim for the end of the year", he said.

He said the target for the next five years, and ideally earlier, was 50 percent but that would depend on available opportunities.

Nyrstar participated in initial talks to acquire miner Anglo American's (AAL.L: Quote) zinc business, but Junck said Nyrstar was unlikely to buy those operations as they would be too costly.

Nyrstar is not interested in expanding its mining business in China as there are more convenient places closer to its smelters, Junck said.

"The best way to take advantage of China is to take advantage of the price of zinc, which is fuelled by Chinese demand," Junck said.

"I like the idea of clusters ... Ideally I would like to have some more mines in Peru," he said.

The group is not looking to grow in smelting, where it has enough capacity, Junck said.

He expected the zinc price to remain stable for now. Zinc futures MZN3 are trading around $2,350 per tonne.

"The market is well supplied so I don't see why the price would go up," he said.

 

Zinc Giant Nyrstar Sees Strong Growth in Mines

Industry News 08:52:49AM Mar 08, 2010 Source:SMM

BRUSSELS, Mar. 8 -- Belgium's Nyrstar (NYR.BR: Quote), the world's biggest zinc producer, aims to increase production of the metal from its own mines to about 30 percent over the next year from 21 percent, its chief executive said on Friday.

The company's drive to expand into mining, which offers higher margins than its traditional smelting operations, has so far resulted in Nyrstar acquiring mines or buying stakes in them in the United States, Greenland and Peru.

It has also reached an agreement to buy zinc concentrate from Finnish group Talvivaara (TALV.L: Quote) in a multi-year deal.

"The profitability of mines is much higher than for smelters," Chief Executive Roland Junck told reporters.

Becoming integrated by 30 percent is "our aim for the end of the year", he said.

He said the target for the next five years, and ideally earlier, was 50 percent but that would depend on available opportunities.

Nyrstar participated in initial talks to acquire miner Anglo American's (AAL.L: Quote) zinc business, but Junck said Nyrstar was unlikely to buy those operations as they would be too costly.

Nyrstar is not interested in expanding its mining business in China as there are more convenient places closer to its smelters, Junck said.

"The best way to take advantage of China is to take advantage of the price of zinc, which is fuelled by Chinese demand," Junck said.

"I like the idea of clusters ... Ideally I would like to have some more mines in Peru," he said.

The group is not looking to grow in smelting, where it has enough capacity, Junck said.

He expected the zinc price to remain stable for now. Zinc futures MZN3 are trading around $2,350 per tonne.

"The market is well supplied so I don't see why the price would go up," he said.