Nyrstar suspends U.S. mine in face of weak zinc price

Mon Dec 7, 2015 2:52am EST
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BRUSSELS Dec 7 (Reuters) - Belgium's Nyrstar NV said on Monday it was suspending operations at another mine as it seeks to reduce cash consumption in the face of weak zinc prices.

The company, the world's largest zinc smelter, said it would place its Middle Tennessee Mines on so-called care and maintenance, resulting in about 50,000 tonnes of zinc in concentrate being taken out of the market.

Zinc metal production at Nyrstar's nearby Clarksville smelter would be reduced by about 7 percent, equivalent to some 9,000 tonnes per year. It would continue to be supplied by East Tennessee Mines and elsewhere.

"We continue to take decisive action to reduce spending in our mines, and further mine operation suspensions may be necessary if the depressed metals price environment continues," Nyrstar chief executive Bill Scotting said in a statement.

Nyrstar said last month it would consider cutting zinc concentrate output by 400,000 tonnes if prices remained depressed. That would be on top of 100,000 tonnes removed by the earlier suspension of its Myra Falls operations in Canada and Campo Morado operations in Mexico, it said.

Zinc three-month forward prices are hovering around six-year lows and are down a third since early May.

Nyrstar has also announced plans for a rights issue of 250-275 million euros ($272-299 million) to shore up its balance sheet and said it could even exit its poorly performing mining business.

"We expect to complete the process to divest the majority or all of our mines over the course of 2016," Scotting said on Monday.

($1 = 0.9206 euros) (Reporting by Philip Blenkinsop; Editing by Mark Potter)