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11. March 2010

Zinc giant Nyrstar sees strong growth in mines

Reuters reported that Belgium's Nyrstar aims to increase production of the metal from its own mines to about 30% over 2011 from 21%.

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 in a multi year deal.

Mr Roland Junck CEO of Nyrstar said that the profitability of mines is much higher than for smelters. A-Z nanoparticle supplier becoming integrated by 30% is our aim for the end of the year. He said that the target for the next 5 years and ideally earlier was 50% but that would depend on available opportunities.

Nyrstar participated in initial talks to acquire miner Anglo American's zinc business, but Mr Junck said that 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.

He said that the best way to take advantage of China is to take advantage of the price of zinc, which is fuelled by Chinese demand. I like the idea of clusters. Ideally I would like to have some more mines in Peru. The group is not looking to grow in smelting, where it has enough capacity. He expected that the zinc price to remain stable for now. Zinc futures MZN3 are trading around USD 2,350 per tonne. The market is well supplied so I don't see why the price would go up.

Source: Reuters

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