GMUSG and SACOME Resources Industry Conference August 2013 GMUSG - - PowerPoint PPT Presentation

GMUSG and SACOME Resources Industry Conference August 2013

GMUSG & SACOME Presentation

Port Pirie Smelter Overview Environmental Health Issues Transformation – A Step Change 2014 Asset Management Plan

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Port Pirie Overview

• Pirie is an integrated multi metal recycling facility – producing lead, silver, zinc, gold,

copper and sulphuric acid, plus a range of other minor by-products.

• Most of the output is exported to Asia
• Process uses sinter, blast furnace and slag fuming technology.
• Production capacity – 230,000 tonnes of lead and 40,000 tonnes of zinc
• It has been in constant operation for more than 124 years
• Strong affiliation and connection with the community – community very parochial

with generations of the same family members working at the site.

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Port Pirie Location

• Situated on eastern shore of Spencer Gulf - this location was critical in early years as it

was the closest town from the Broken Hill mine with the deepest sea port.

• However the close proximity to the community create a community environmental health

issue.

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Port Pirie Overview

• Port Pirie is extremely significant to the region and South Australia*
• Nyrstar contributes $1.6 billion to the value of South Australian economic output
• Value add to GSP = $518 million
• Direct employment = 838 FTE’s (made up of 705 Nyrstar employees and 133

contractor FTE’s)

• Total employment effect (FTE’s) = 2,342
• Total wages effect = $270 million
• Taxation impact = $102 million
• Significant social capital contributions to the community of Port Pirie –

sponsorships, donations, promotions and publicity – in excess of $4M AUD (2007-2012) * Analysis of 2010 completed by IMC Link

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Port Pirie Process

Zinc Zinc Sulphuric Acid Plant Concentrates Residues Fluxes Zinc Slag Fumer

ACID

Fume Leach Solution Purification Electrolysis

ZINC

Sintering Lead Blast Furnace Cupellation Electrolysis

GOLD SILVER COPPER

Copper Drossing As, Sb removal (Softening) De-silverising De-zincing Chloride Leach Solvent Extraction Electrolysis De-bismuthising

LOW Bi LEAD

Bullion Final Refining

LEAD

SO2 Slag Copper Matte Alloy Vacuum Retorting

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Production – a changing landscape

Greater focus on value creation

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GMUSG & SACOME Presentation

Port Pirie Smelter Overview Environmental Health Issues Transformation – A Step Change 2014 Asset Management Plan

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Port Pirie issues

• Very old site – constant operation 124 years - old technology, aged processing and

instability generates emissions;

• Since 2006, more than $50m of capital invested directed at emission

reduction/environmental improvement

• Critical structural recovery program in place
• Focus over a long period of time has been on identifying potential new

technologies and delivering sustainability to the site.

• Continued constant focus on reducing emissions – operationally and through

environmental awareness - training and changed work practices

• Recruitment of professionals – technical, engineers, trades – has historically been

difficult

• Relationships critical with key government and regulatory bodies – our focus is to

work collaboratively with stakeholders.

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Significant Health and Safety Achievements on site

Safety performance has been improving steadily over many years Lead in blood shows similar improvements

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50 100 150 200 250 300 350

• No. of Employees

NYRSTAR EMPLOYEES + CONTRACTORS

BLOOD LEAD LEVEL 12 Mth Mov Average

>= 35 ug/dL >= 30 ug/dL

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Blood Lead Reduction Programs - Background

• Long history of elevated blood levels in children in the Port Pirie community-

potential impacts include behavioural and cognitive development problems.

• 2005 WHO recommendation was less than 10 μg/dl – focus is now on achieving

levels below 10 ug/dl.

• In 2005 following increases in children’s blood lead levels, (Zinifex) Nyrstar

approached several key stakeholders – SA Health, the Port Pirie Regional Council, and the EPA to propose a unique way of addressing the issue.

• The idea involved key partners working collectively to achieve the required

reduction in lead levels in children under 4 years of age, at risk age group.

• The tenby10 program commenced in 2005 – goal was to have at least 95% of

children 0-4 years below 10 ug/dl by the end of 2010

• End of 2010 name change to “tenforthem”
• 2011 name changed to “thumbs up for low levels” – reflects the move away from a

focus on achieving 10 ug/dl - focus now on getting all children as low as possible.

• Transformation needs the community to continue to be proactive – community

blood lead levels must be maintained – new program will focus on “the future we all want”

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Monitoring Lead in Air – Comprehensive air monitoring network

Winter Summer

Local climate is dominated by strong northerly winds in winter and southerlies during the summer.

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Exposure pathways are complex – social economic impacts

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Community engagement focus

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Ensuring effective community consultation, communication and engagement critical to the ongoing success of the project;

• Significant financial support to childcare facilities and kindergartens,

cleaning equipment, air conditioning, new carpet, new vacuum cleaners etc.

• Nutritional program for kindergarten, childcare centres and schools –

raise healthy eating and hygiene.

• Additional childcare placements for children from high risk homes –

extremely successful

• Multi media platforms – Website, TV/Radio
• Employee and contractor car cleaning and detailing
• Awareness material – DVD’s, flyers, brochures
• Much has been achieved since 2005 however a step

reduction in children's blood lead levels now required.

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Baghouse installed TOTAL CAPITAL & OPEX SPEND TO DATE $46M Slag Fumer Coal Injection $6.6M Blast Furnace Enclosure - $9.5M

Blood Lead Reduction Capital projects

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Before After

Tenby10 Capital projects

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Blood Lead Reduction Programs– Significant Outcomes achieved

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GMUSG & SACOME Presentation

Port Pirie Smelter Overview Environmental Health Issues Transformation – A Step Change 2014 Asset Management Plan

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Transforming the Future - Overview

• Transformation announcement is important and significant for Nyrstar, the Port Pirie
• peration, its employees, the community of Port Pirie and the wider region.
• The announcement was the culmination of many months of discussions and

negotiations between Nyrstar and both State and Federal Governments, the key focus

• f which was on identifying a sustainable future for the smelter and the community of

Port Pirie.

• The in-principle funding and support agreement that was reached by the parties allows

work to proceed to transform the Port Pirie smelter through new technology to an advanced poly-metallic processing and recovery facility capable of processing a wide range of high value, high margin raw materials.

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Transforming the Future

• Agreement reached supports construction of $350 million poly-metallic processing

and recovery facility

• Historic agreement secures long-term future of Port Pirie and jobs of the 800+

direct employees and 2,500 people who rely on Nyrstar plant for their livelihood.

• Best practice closed smelting technology allows Nyrstar to deliver environmental

and health outcomes simply not possible through continued use of 124-year smelter

• Pre-feasibility study by September 2013, final investment case including detailed

bankable feasibility studies expected by end of 2013.

• Final Government approval end of 2013, final Nyrstar Board approval March 2014
• Pending positive outcomes of feasibility studies the new plant construction begins

2014, commissioned in 2016

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Transforming the Future – Funding

• Nyrstar will to invest up to $200 million of $350 million in the advanced poly-metallic

processing and recovery facility at Port Pirie. $100 million from its own balance sheet and $100 million funded by forward sale of silver

• South Australian Government will provide forward sale financier regulatory certainty

to support the forward sale of free metal

• Commonwealth and State Government support is required to attract additional

$150 million private investment

• Commonwealth, through Export Finance and Insurance Corp’s (EFIC) National

Interest Account, will assist Nyrstar attract private investment by providing a guarantee to $170 million

• State provides environmental regulatory certainty for 10 years post-investment and

contributes $5 million to Nyrstar’s $15 million feasibility study which will be repaid into Targeted Lead Abatement Program

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Nyrstar Technology Transformation

• Primary source of lead emissions at Port Pirie is the sinter plant – transformation

will replace the sinter plant with international best practice closed smelting technology

• Post-transformation lead-in-air at EPA licensed monitoring sites to be reduced by at

least 50%

• 10-fold reduction in sulphur dioxide emissions
• Transformation will be lead by a dedicated GM, supported by a project team

comprising internal and external resources.

• Current operation will continue while new assets constructed built – strong focus on

continuing emission reduction initiatives.

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Targeted Lead Abatement Program

• New Targeted Lead Abatement Program will focus on remaining children above 10

ug/dL

• Program will require multiple programs including cleaning of key houses and
• ngoing advice on hygiene and nutrition
• In some cases will require voluntary relocation of families to low-risk areas
• Improved handling and processing practices within new Port Pirie facility
• Program aims to increase number of children below current guideline to at least

95%

• Outcome will deliver sustainability to the site and the community.

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GMUSG & SACOME Presentation

Port Pirie Smelter Overview Environmental Health Issues Transformation – A Step Change 2014 Asset Management Plan

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26 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000 2008 2009 2010 2011 2012 2013

Asset Managment Budget / Actuals

Budget Actual / Forecast

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Asset Management 2014 – Opex & Capital

Key Sustaining Spend

• Lead Shutdown (October)

$10m

• Site structural recovery

$4m

• Acid plant sustainability

$4m

• Fume fan control system upgrade

$1.5m

• Flakt refurbishment

$1m

• Recuperator rebuilds

$0.5m

• Compliance, crane 25/10

$0.5m

• Leaching - bund & tank upgrades

$0.5m Key Growth Projects

• Copper debottlenecking
• Silver dore capacity increase

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Questions?