Taxpayer rescue of two smelters avoids a “national catastrophe” but Australia must now develop a strategy to retain sovereign capability in manufacturing metals, a union urges.
Smelters in Hobart and South Australia’s Port Pirie will pivot to producing critical minerals in an ambitious modernisation supported by the bailout to protect jobs.
The federal, SA and Tasmanian governments on Tuesday announced contributions to the $135 million package for smelters operated by international producer Nyrstar.
As a result, entire communities “staring down the barrel of disaster” had been pulled from the brink, Australian Workers Union national secretary Paul Farrow said.
“To lose Nyrstar would have constituted a national catastrophe,” he said.
China was spending more on propping up its manufacturing sector than it spends on defence, he warned.
“Either we let them undercut our operations into oblivion, or we step up with a strategic national approach,” he said.
“We need to develop a better approach than playing whack-a-mole every time there’s a crisis (and) develop a long-term, national strategy to retain our smelters.”
Combined with investment by Nyrstar, the package allows the company to maintain operations while planning to potentially rebuild and modernise both its lead smelter in Port Pirie and zinc smelter in Hobart.
SA Premier Peter Malinauskas said it was an opportunity to transform the Port Pirie smelter and secure its long-term future.
“This town, this facility, has a potentially very bright and prosperous future indeed, but we know it’s going to be a journey to get there, which is why partnership is mission-critical,” he said.
“We know there is a journey in front of us to be able to tackle the challenges we see, particularly coming out of China, but we should be up-front and honest about them.”
The funding will also help fast-track feasibility studies into critical metals production.
Nyrstar will explore the potential production of essential critical minerals including antimony and bismuth at Port Pirie and germanium and indium at Hobart.
An immediate focus of the package is an antimony pilot plant in Port Pirie, which would make it the only producer of antimony metal in Australia and one of the few producers globally.
Antimony is an alloy hardener for other metals in ammunition and critical to manufacturing semiconductors found in electronics and defence applications.
Federal Industry Minister Tim Ayres said that within months, the facility should be upgraded and able to produce 15,000 tons of antimony, which is about 40 per cent of American antimony requirements.
As Australia’s only lead refiner and largest zinc refiner, Nyrstar contributes about $1.7 billion annually to Australia’s economy, supporting 1400 direct jobs and 6647 indirect jobs.
The support will also fund “asset integrity projects” including a major maintenance project in Port Pirie requiring 350 contractors and 90 suppliers, and major furnace and wharf investments in Hobart involving 200 contractors and suppliers.
The support demonstrates the strategic importance of Australian operations in “extremely challenging global market conditions”, Nyrstar global chief executive officer Guido Janssen said.
Independent Tasmanian MP Andrew Wilkie said the survival of the zinc works, along with other facilities like Liberty Bell Bay, Mt Isa and Whyalla, was “central to Australia’s economic future and national security”.
“When it comes to critical minerals and rare earth minerals in particular, Australia is remarkably well positioned to be a globally important supplier,” he said.
Mining giant Glencore faces similar challenges at its Mt Isa copper smelter and Townsville refinery, and warned it will be forced to put both facilities into care and maintenance mode – risking thousands of jobs – if it does not receive taxpayer assistance.
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