Tue, 29 Oct 07:59:00 GMT
BRUSSELS, Oct 29 (Reuters) - Belgium zinc group Nyrstar unveiled 280 million euros ($386 million) of investments in a series of projects to improve the profitability of its zinc smelting business and confirmed funding to redevelop a smelter in Australia.
Nyrstar, the world's largest zinc smelter which has increasingly expanded into mining, said in a statement on Tuesday that it would spend 280 million euros on 25 projects.
The projects, none of them individually exceeding 50 million euros, include removing bottlenecks at smelters, building fuming capacity and extraction of minor metals, would begin in early 2014.
Nyrstar said it could start improving earnings from late 2014, with completion by early 2017. The post-tax internal rate of return would be 25-30 percent.
The first part of Nyrstar's transformation would be a 5 million euro acquisition of ERAS Metal, the owner of a fuming plant in Hoyanger, Norway, with a further 2 million euros to upgrade the plant.
Nyrstar also said it would directly invest 80 million euros to redevelop a lead smelter at Port Pirie in South Australia into an advanced metals recovery and refining facility.
It previously announced the redevelopment plan in December 2012, although it said the overall investment required would be 270 million euros, 10 million euros lower than the funding package arranged. [ID:nL5E8N31AG]
Of that, 120 million euros would come from third party investors, benefiting from Australian state guarantees, and 80 million from the forward sale of incremental silver produced at Port Pirie.
Nyrstar said construction would begin in 2014, with commissioning in the first quarter of 2016. The company said it should generate a post-tax internal rate of return of 25-30 percent.
($1 = 0.7254 euros)
(Reporting By Philip Blenkinsop, editing by Robert-Jan Bartunek)