Glencore unit buys stake in American Zinc Recycling

A subsidiary of Glencore Plc has purchased a 10% stake in US electric-arc furnace dust recycler American Zinc Recycling Corp (AZR), both companies confirmed to American Metal Market.

The companies declined to provide the financial details of the deal, which closed on Thursday December 7.

Under the terms of the agreement, Glencore will provide engineering and project management services, expediting the restart of AZR’s Mooresboro, North Carolina, zinc production facility, which was idled in January 2016.

Ali Alavi, AZR’s senior vice president of corporate and environmental affairs, noted that Glencore operates a similar facility in Italy and should be able to apply its knowledge to help restart Mooresboro. “We think it’s a really good fit,” he said.

AZR is targeting a mid-2019 restart of the Mooresboro facility, Alavi said, although “we believe we can get to production sooner than that and that’s what we’ll be striving for.” The facility has been under construction since AZR emerged from Chapter 11 bankruptcy protection in October 2016.

AZR and Glencore’s subsidiary have also entered into a 10-year offtake agreement for the full metal output of Mooresboro at prevailing market rates, to commence once the plant is restarted. Glencore is losing access to Nyrstar’s commodity-grade zinc in the United States when its seven-year marketing deal with Nyrstar ends in 2018.

Pittsburgh-based AZR estimated in 2014 that at full capacity the Mooresboro plant would produce 155,000 tons of special-high-grade zinc and continuous-galvanizing-grade zinc annually.

The London Metal Exchange’s three-month zinc contract closed at $3,083 per tonne ($1.40 perlb) on December 8, down 5.1% from $3,247 per tonne on November 24.

“Glencore’s zinc process engineering and general project execution expertise will enhance our own ongoing activities aimed at rapidly restarting production at Mooresboro,” AZR chief executive officer Rodrigo Daud said in a statement.

“Glencore is pleased to be deploying its technical and commercial expertise to work in this unique partnership with AZR, both at Mooresboro and across the AZR group,” Chris Eskdale, Glencore Zinc’s head of assets, said in a statement.