Nyrstar to take up to 600kt zinc concs from Century Mine; arbitration shelved
The largest zinc smelter in Europe has sealed an offtake agreement with the operator of Century Zinc Mine for up to 600,000 tonnes of zinc concentrates over five and a half years, Nyrstar said on Monday February 26.
Nyrstar, which has long been an offtaker of Century concentrate will receive 250,000 tonnes of zinc concentrates for the first three and a half years of the agreement, rising to 350,000 tonnes in the final two years, Nyrstar said.
The Queensland mine, on track to start production in July, is expected to generate up to 507,000 tpy of zinc concentrates with 52% zinc content over an initial 6.3-year mine life.
The timetable and terms of the agreement have not been disclosed by Nyrstar while its annual zinc concentrate supply contract negotiations are under way.
Arbitration request to enforce ‘Life of Mine’ agreement suspended
Meanwhile, Nyrstar has suspended its arbitration request filed earlier this month to execute a “Life of Mine” agreement signed over ten years ago in 2007.
A complete withdrawal of arbitration hinges on the “documentation of the formal offtake agreement on terms consistent to the binding term sheet and the deed of settlement,” according to a statement by the smelter.
Historically, Nyrstar received approximately 90% of the zinc concentrate output from Century Mine – then operated by former owner MMG – under a “Life of Mine” agreement.
The smelter lost the feed from Century after the mine was closed in late 2015 following the depletion of primary ores.
A year later, the project was sold to New Century Resources which targeted to produce 264,000 tpy of zinc out of the zinc waste.
In early February, Nyrstar filed an arbitration request to enforce its “Life of Mine” offtake agreement over the Century Zinc Mine, a move described as an “opportunistic claim” by operator New Century Resources.
The arbitration request was announced when Mercuria and Transamine secured 750,000 tonnes of zinc concentrates from Century Mine via offtake agreements at floating spot market terms.
That tonnage represents total output from the first three and a half years of scheduled tailings processing operations.
Together with the offtake agreement with Nyrstar, a total of 1.35 million tonnes of Century zinc concentrates have already been taken.
Century zinc concentrate, despite its complex quality with a high silicon dioxide content, is sought-after amid tight concentrates supply which has kept its treatment charges (TCs) at a multi-year low.
Metal Bulletin’s spot zinc concentrate TC stood at $10-30 per tonne in February, unchanged from a month ago.