BRUSSELS, July 20 -- Nyrstar NV, the world's largest zinc producer, bought two mines in Peru for about $39 million including debt, its second purchase in the country to obtain raw materials for its smelters.

Nyrstar plans to triple annual output at the Contonga and Pucarrajo mines to 40,000 metric tons of zinc by the end of 2012, the Balen, Belgium-based company said today in a statement. Operations at Pucarrajo, north of Lima, have been suspended since June 2009.

Buying idled mines and ramping up output will give Nyrstar, owner of six smelters on three continents, a larger share of the revenue generated by turning ore into finished metal. The Peruvian mines will raise Nyrstar's zinc production capacity from its own resources to about 25 percent of the total from 21 percent, at an estimated cost of less than $1,000 a ton after discounting revenue from their silver, lead and copper deposits.

"The newly acquired mines are very competitive on the cost curve thanks to strong by-products credits," Wouter Vanderhaeghen, an analyst at KBC Securities NV in Brussels, wrote in a note. "Nyrstar will also be able to realize some synergies with its existing operations in Peru."

Mines Management

Nyrstar, which in the past year spent $19.4 million buying the idled Coricancha mine, east of Lima, from Gold Hawk Resources Inc., said today that a single management team will lead operations at all its Peruvian mines. Coricancha resumed output of gold ore on June 12, according to a presentation posted on Nyrstar's website.

Nyrstar was unchanged at 8.49 euros at the close of trade on Euronext Brussels today, valuing the zinc producer at 849 million euros ($1.1 billion). The shares have risen 1.8 percent this year.

Zinc for delivery in three months advanced 0.5 percent to $1,806 a ton on the London Metal Exchange. The metal, which is used to protect steel from corrosion, has averaged $2,151 so far this year.

Smelters are getting an estimated 36 percent of zinc revenue this year, down from 42 percent in 2009, based on the fees that mining companies agreed to pay to have their semi- processed ore turned into finished metal, Nyrstar said in April.

Nyrstar said it would get an ore-treatment fee of $250 a ton this year, based on a zinc price of $2,000 a ton. Smelters are paid an extra 5 cents for every dollar the market moves above that price and 9 cents for every dollar above $2,500 a ton. For every dollar drop, smelters receive 6 cents less.