Nyrstar Buying Glencore’s East Tennessee Mines

Nystar announced in mid-September 2009 that it has agreed to acquire the Glencore Group’s East Tennessee Zinc mine complex in the U.S. for $126 million. The complex comprises the Young, Immel and Coy mines, all located within about 20 miles of each other and about 250 m east of Nyrstar’s Clarksville, Tennessee, zinc smelter and its Gordonsville, Tennessee, zinc mine.

The East Tennessee mines have been on care and maintenance since February 2009. The Glencore Group acquired the mines in May 2006 for $65 million and subsequently invested in plant upgrades and other improvements. At full production, Nyrstar expects the East Tennessee mines to produce about 110,000 mt/y of zinc in concentrates.

Commenting on the acquisition, Nyrstar CEO Roland Junck said, “Consistent with our strategy, the acquisition provides an opportunity to capture a number of significant synergies in relation to cost reductions and operational benefits between our [Tennessee] operations, thereby supporting a long-term sustainable future for these operations. We have recently commenced limited operations at the Gordonsville zinc mine complex, and we intend to pursue a measured ramp up of those operations over the next six months. The East Tennessee mine complex has a strong and experienced workforce, and we intend to recommence operations at the mine complex as quickly as possible.”

Subject to a number of conditions, including due diligence, completion of the transaction was expected to occur during the fourth quarter of 2009.

As featured in Womp 2009 Vol 08 - www.womp-int.com