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Nyrstar files arbitration request for offtake rights from Century Zinc mine

Metal News - Published on Mon, 12 Feb 2018

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Nyrstar, the world’s second largest zinc smelter, has filed an arbitration request to the operator of Century Zinc mine to enforce “long-standing Life of Mine agreements” for the offtake of zinc concentrates. The dispute centers on a life of mine offtake agreement Nyrstar had for concentrate from the Century mine in Australia, recently revived via tailings reprocessing by new operator New Century Resources.

Prior to the mine’s closure in late 2015, Nyrstar received approximately 90% of the zinc concentrates output from Century, which was once the world’s largest zinc mine.

Nyrstar’s corporate communications manager Franziska Morroni said in an emailed statement that “New Century Resources announced an intention to re-start the mine some time ago and we have been in discussions with them for a number of months about the enforcement of our pre-existing rights to the offtake.”

The spokeswoman added that “As those discussions have not been resolved to our satisfaction, Nyrstar has been forced to commence arbitration proceedings in London to enforce its rights.”

Nyrstar’s filing on February 6 came as New Century was preparing to announce its first offtake agreements with trading houses Transamine and Mercuria, in which it has agreed to sell an estimated total of 750,000 tonnes of 54% zinc concentrates from the project over three and a half years.

The mine is forecast to produce 507,000 tonnes per year of zinc concentrates over an initial 6.3-year mine life.

A 2011 Hong Kong Stock Exchange regulatory filing by former Century owner MMG noted the agreement, stating that “Nyrstar has a life-of-mine contract over Century’s production.”

New Century said in a statement it had not been shown these agreements which were entered into in 2007.

It said in a regulatory filing published that “New Century believes that the opportunistic claim by Nyrstar has no merit and that any historical agreements with Nyrstar were terminated well before the company acquired its interest in the Century Zinc mine.”

New Century said arbitration would not prevent the company from signing or performing its obligations under any new offtake agreement.

It also mentioned Nyrstar as one of the unsuccessful parties competing for the Century zinc concentrate offtake, which will be produced from tailing reprocessing in July at the earliest.

Historically, Nyrstar took 90% of Century zinc concentrates and processed it in the most part in its Hobart and Budel smelters, the smelter said.

Hobart in particular relied on Century for 70% of its feed up to 2015, records on Nyrstar’s website show.

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Posted By : Amom Remju on Mon, 12 Feb 2018
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