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House of Assembly - Fifty-Third Parliament, First Session (53-1)
2014-05-20 Daily Xml
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Ministerial Statement

Nyrstar

The Hon. J.W. WEATHERILL (Cheltenham—Premier) (14:02): I seek leave to make a ministerial statement.

Leave granted.

The Hon. J.W. WEATHERILL: Today I am pleased to inform the house that the state government and Nyrstar have agreed to a significant financing commitment which will now allow us to secure the future operations of Nyrstar's Port Pirie smelter. It was pleasing last Friday to join the member for Frome and the Treasurer in Port Pirie to formalise this government's commitments with Nyrstar to ensure that this transformation can occur after so many years of uncertainty. The transformation project involves more than half a billion dollar investment, comprising:

a direct contribution from Nyrstar of about $103 million;

Nyrstar will contribute a further $120 million to be raised through a transaction for the forward sale of silver output from the redeveloped Nyrstar Port Pirie facility; and

a $291 million third-party funding package guaranteed by the commonwealth's Export Finance and Insurance Corporation, with risk underwritten by the South Australian government for a period of seven years.

As many of you would be aware, the government and Nyrstar have been in extensive negotiations for more than two years to enable this upgrade to occur. We took detailed advice from the Export Finance and Insurance Corporation (EFIC), the Crown Solicitor's Office, an independent leading international commercial advisory firm, and health and environmental experts regarding this project and agreement. Based on this advice, we can be satisfied that:

the technology involved in the transformation is proven and viable;

without the government guarantee, Nyrstar would have been unlikely to raise the required capital to allow the project to proceed;

the business case supporting the financial viability of the project is strong and subsequently the risk to the state government's guarantee being called upon is low;

there are no legal barriers regarding the government entering into the agreement; and

the transformation will allow the smelter to operate in a way which substantially reduces health and environmental issues.

This investment transforms the century-old smelter into a modern advanced metals processing and recovery facility. Works are expected to commence soon with the transformed facility in operation in 2016. Currently Nyrstar is one of the state's largest exporters and a major employer in regional South Australia.

Transforming the metals processing facility with modern, proven and best available smelting technology will enable it to have greater flexibility to respond to the global metal markets by processing a wider range of inputs, extracting and producing traditional as well as high value, in-demand metals. This allows us to secure a future for thousands of South Australian families and the many businesses that rely upon the smelter for their livelihood.

The investment will deliver significant environmental benefits. The reduced lead-in-air outcomes will reduce the health risk to young children. This outcome will be further enhanced by the Targeted Lead Abatement Program for Port Pirie that has been jointly developed by the South Australian government and Nyrstar. The 10-year $50 million Targeted Lead Abatement Program will further improve the health of the people of Port Pirie.

This agreement shows that this government is committed to working with businesses and the community to secure long-term investment in our state. This agreement shows our commitment to the people of Port Pirie and our commitment to protecting jobs and our commitment to regional South Australia. I also seek leave to table an abridged version of the agreement between Nyrstar and the government of South Australia.

The SPEAKER: The Premier does not need leave.

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