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Metals recycling major to move into mining

Archiv – Belgian metals company Nyrstar has announced in a Strategic Review that it is to expand into mining. The company contends that this upstream move will benefit the business by ensuring an increased exposure to metal prices throughout the economic cycle.Belgium | Belgian metals company Nyrstar has announced in a Strategic Review that it is to expand into mining. The company contends that this upstream move will benefit the business by ensuring an increased exposure to metal prices throughout the economic cycle.
The world’s largest producer of zinc metal and alloys and a leading global producer of lead, Nyrstar also produces silver, indium, copper, gold and sulphuric acid as by-products. It operates smelting, refining, alloying, galvanising, die-casting and recycling plants in Europe, the USA, China, Europe and Australia, some of which are wholly owned while others are joint ventures.
The company recently bought the Mid-Tennessee Zinc mine complex in the USA. In its Strategic Review, however, the company declines to identify the mining regions in which it is interested or any companies it might seek to acquire. It confirms that it will focus on resources which support the company’s existing assets and which represent markets in which Nyrstar already has expertise and capability. It explicitly cites zinc, lead, silver, gold and copper.
’Our aim is that smelting and mining will both provide valuable contributions to our earnings as we strive to become the partner of choice in essential resources for the development of a changing world,’ says Nyrstar’s CEO Roland Junck. ’We continue to believe in the benefits of industry consolidation and will evaluate opportunities as and when they arise and where they create value for our shareholders.’
In the short term, Nyrstar believes that the global economy and the metals markets are both at, or near, a turning point, but that the markets will remain volatile. In the medium to longer term, industrialisation and urbanisation of the BRIC countries (Brazil, Russia, India and China) are likely to increase metals consumption greatly; but in the aftermath of global recession and the credit crunch, the metals sector will have a reduced capacity to meet this growing demand, it argues.
This positive resources outlook will provide opportunities, according to Nyrstar. The company believes that current mining valuations are conservative, creating an immediate opening for expansion into mining, and that its move upstream could encourage broader consolidation within the industry.
The company’s strong financial position will aid such growth: it boasted Euro 176 million (US$ 123 million) in cash at the end of March and undrawn credit facilities of Euro 350 million (Euro 150 million from 2010).

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