News Releases

Balen, Belgium (26 November 2008) - Nyrstar NV today informed its Belgian works councils that it will temporarily suspend production and initiate a care and maintenance program at its Balen smelter due to adverse economic circumstances.  The program, which will take place before year end, is necessary to address the significant and sudden decline in customer demand and reduce the accumulation of surplus zinc stocks in the market.  The suspension will also minimise losses at the plant which have been caused by the prevailing low zinc price, falling 58% from its 2008 peak, combined with Balen's high energy and production costs.  Balen currently has the highest labour cost across the Nyrstar Group and its energy cost has increased by more than 50% in the last 12 months.

 

The suspension is anticipated to continue until mid 2009, but will be reviewed over the coming months.   This equates to a reduction of approximately 25,000 tonnes of zinc in 2008 and a further 130,000 tonnes in the first half of 2009.

 

Nyrstar has previously announced that it is reducing production at its Budel plant by 28% for the remainder of 2008, and this reduced level of production will now be maintained through mid 2009.   For Budel, this equates to a reduction of approximately 10,000 tonnes of zinc in 2008 and a further 35,000 tonnes in the first half of 2009.

 

The care and maintenance program at Balen will help to ensure the plant is maintained in a ready condition, enabling it to return to production when economic conditions improve. The adjoining site at Overpelt will continue to operate at a reduced five-day week, producing die-cast alloys and providing washed zinc oxides for the Group.

 

Paul Fowler, chief executive officer of Nyrstar, said,

"The decision to put Balen on care and maintenance has not been taken lightly, and the Company regrets the impact on our employees, their families and the community.  However, it is clearly unsustainable for Nyrstar and the industry to build stocks and produce metal at a loss.  Taking decisive action now is the best way to provide our European plants with a sustainable future." 

 

"If the current market conditions continue, further actions across the Group may become necessary." 
 

 

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Balen is Nyrstar's largest zinc smelter producing 255,000 tonnes of zinc cathode in 2007.

Nyrstar NV is the world's largest producer of zinc metal and alloys, and in addition, is one of the world's largest primary lead smelting and refining companies. The company produces other valuable by-products including copper, gold and indium, along with significant quantities of refined silver. In 2007 Nyrstar produced more than one million tonnes of zinc. Incorporated in Belgium and with its corporate offices in London (United Kingdom) and Balen (Belgium), Nyrstar has wholly-owned operations in Australia, Belgium, France, the Netherlands and the USA and joint ventures in Australia, China and France. Nyrstar is listed on Euronext Brussels under the symbol NYR. For further information visit the Nyrstar website, www.nyrstar.com

 

 

jan.van-heuverswyn@interel.eu