Nyrstar Netherlands ‘urgently needs government support’

The zinc group Nyrstar ‘urgently needs support’ from the Dutch government for its branch in Budel, Netherlands. There is no problem for Nyrstar in Balen en Pelt.

Nyrstar, originally from Belgium, is one of the largest zinc producers in the world. In addition to production sites in Australia and the US, it has factories in Balen en Pelt, Budel (just across the Dutch border), France and Germany. However, the production of zinc requires a lot of electricity, so it is not always easy to produce it profitably.

As a result of sharply increased energy prices, Nyrstar has had to shut down production in Europe several times in recent years. Balen and Pelt, among others, which together form one branch, are now operating at 100 percent of capacity again, Nyrstar circles say. But the factory in Budel has been shut down since the beginning of this year. For the most part, anyway. Specific alloys are still made for certain customers, but zinc is no longer manufactured there for the time being.

There are two reasons for this. The Dutch government canceled a tax break for the industry and increased the compensation for the local grid operator. According to our information, the first measure has an effect of approximately EUR 40 million, the second means that Nyrstar now has to pay approximately EUR 25 million in grid fees per year, instead of EUR 0.4 million. Together that is an impact of approximately 65 million euros. Nyrstar spokeswoman Gytha Steenvoorden confirms these figures.

Nyrstar Budel is limiting losses by not operating for the time being, but that is not sustainable, Guido Janssen, the CEO of the zinc group, said on Wednesday in an interview with the Dutch channel RTL Z. According to him, Budel ‘urgently needs help’ from The Hague to survive in the long term. “Energy prices have now fallen, but there is no level playing field in Europe,” says Janssen. “If that isn’t resolved, we’ll have a problem.”

Janssen does not want to anticipate the possible consequences if support is not forthcoming. He confirms that he is afraid that Nyrstar may have to leave the Netherlands. ‘A first point of concern’, according to Janssen, is ‘keeping everyone on board’. There is also a risk that a planned investment of 100 million euros in Budel in a ‘virtual battery’ will not go ahead.

According to the CEO, Dutch politicians should think more strategically when it comes to industry, a demand that is also heard in Belgium. Janssen does not say exactly how much and what kind of support his company needs. He does, however, reveal something about the period in question: ‘At least in the coming years.’ In five years’ time, the European playing field will be leveled and support in all other countries will stop.

Nyrstar employs approximately 4,000 people worldwide, approximately 500 of whom are in Budel. More than a fifth of the people in Budel are Belgians. The head office is also located there. Singaporean commodity trader Trafigura has been the controversial owner of the zinc group since 2019. Trafigura is very profitable. Separate results from Nyrstar are not known. Trafigura’s latest annual report (until the end of September 2023) only mentions ‘continuing significant headwinds’ for the zinc producer in 2024.