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:: Ausmelt, Zinifex to Proceed with Whyalla Project
Ausmelt Ltd has announced that it has concluded an agreement with Zinifex and will proceed with a project to toll process zinc-bearing primary leach residues from Zinifex’s zinc production operations in Risdon, Tasmania.
Ausmelt recently completed its final feasibility study for the project and will now proceed with modifications to its Whyalla plant. Production is expected to start around the end of this calendar year.
Ausmelt and Zinifex have signed a toll processing agreement under which Ausmelt will process 55,000 tpa of PLR feed to recover a high zinc content product which will be returned to Zinifex as an attractive feed for its zinc production operations. The agreement is for an initial 2-year period although both companies anticipate the supply of feed will extended beyond this.
Zinifex will buy additional zinc fume produced from any other materials that Ausmelt treats at the Whyalla plant. These additional materials might include electric arc furnace dusts from steelmaking operations and locally available zinc ores.
Ausmelt Managing Director Mr Paul Abbott said today the feasibility study indicated Ausmelt would generate about $30 million in revenues over two years from the Zinifex contract. He said the project would have a material impact on Ausmelt’s earnings, starting in 2007-08 and is forecast to become a major profit contributor for the company in the years following. “This project offers Ausmelt the prospect of stable long-term cash flows providing we can continue to source suitable feed materials, and we are optimistic we can achieve that," Mr Abbott said.
“One of the main challenges Ausmelt has faced in recent years is the volatility of its cash flows and earnings. The company has been very successfully marketing its top submerged lance non-ferrous smelting technology around the world, but this business is project-driven and as a result, it is prone to variability in revenues. “The scale and predictability of the revenues and earnings expected from the Whyalla project will take Ausmelt to another level and significantly reduce its dependence on non-ferrous smelting projects. The project will also provide a solid platform for further business growth in metals recycling and waste material processing activities”
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