Nyrstar has entered into short-term strategic hedging arrangements to mitigate potential down side risks with respect to the price of zinc. The hedges are for approximately 70% of the free metal produced by the company’s metals processing segment — 8,000 metric tons (mt) of zinc metal per month — from September to the end of the first quarter of 2017. The collar structures implemented result in full exposure to a floating zinc price between $2,137/mt and $2,437/mt from September to the end of December. For Q1 2017, the collar structure results in full exposure to a floating zinc price between $2,100/mt and $2,457/mt. Thereafter, Nyrstar again retains full exposure at a price above USD 2,800/t.
“Nyrstar’s transformation and turnaround plan, announced in November 2015, targets balance sheet strengthening and portfolio restructuring with an exit from mining and a refocus of the company on its core metals processing segment and is sensitive to foreign exchange and zinc price movements,” said Bill Scotting, CEO, Nyrstar. “While we believe that the zinc price should continue to rise on the basis of improving supply and demand fundamentals and that the Euro should depreciate over the medium term against the U.S. dollar, we are prudently entering into short-term hedging arrangements to reduce downside risk to the company’s earnings as we execute the transformation plan.”
Belgian-based Nyrstar has mining, smelting, and other operations located in Europe, the Americas and Australia and employs approximately 5,000 people.