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World's largest zinc producer production falls in 3Q - and more cuts ahead

(Reuters)
Updated: 2008-11-19 10:52
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Belgium's Nyrstar (NYR.BR), the world's biggest producer of zinc, said on Tuesday its zinc production fell in the third quarter and warned of further production cuts in 2009 amid a gloomy economic outlook.


"If the present economic environment persists, further production cuts will be made in 2009. All options to improve performance are on the table," Nyrstar Chief Executive Paul Fowler said in a statement.


Zinc market metal production fell to 258,500 tonnes in the third quarter, down year-on-year and a 7 percent fall from the April-June period. Zinc cathode output was four percent down quarter-on-quarter.


Nyrstar, which said it did operate profitably in the third quarter, said zinc market metal production for 2008 was now projected to be up about 1 percent.


The group had previously said it targeted an increase of all zinc production of 3 percent in 2008.


The group said it faced zinc prices 16 percent lower quarter-on-year and 45 percent down from year-ago levels as the commodity boom has come to an end.


It was now focusing on cost-effective production and prudent cash management to maintain total operating costs at close to 2007 levels despite increasing energy prices.


Nyrstar is a joint venture which combines the zinc smelting assets of Belgium's Umicore (UMI.BR) and Australia's Zinifex ZFX.AX.


It floated on Euronext Brussels in October 2007 and is now the the world's biggest producer of zinc, churning out over 1 million tonnes a year and overtaking Korea Zinc 01030.KS and Xstrata (XTA.L).


The group's shares have dropped by more than 85 percent from their flotation price of 20 euros.

 

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