A pre-feasibility study into the proposal to redevelop the Nyrstar smelter at Port Pirie has found that it is viable to start the project next year.
As The Port Pirie Recorder reports, the $350 million upgrade is being considered to make the plant cleaner and more profitable.
According to the study, the upgraded facility would be commercially viable and would provide a 25 to 30 per cent internal rate of return.
“The smelting strategic review identified a significant amount of non-realised value in feed material that Nyrstar controls via the concentrates its mines produce, the residues its zinc smelters produce and historical ponds at the smelters,” Nyrstar said in a statement.
“The redevelopment will also enable an increase in the production of metals.
“Earnings and free cash flow are expected to be driven by a significant increase in operating costs and sustaining capital expenditure.”
The ABC reports that South Australian Manufacturing Minister Tom Kenyon was happy with the result of the pre-feasibility study.
"This is an important investment for South Australia and it's important obviously for Port Pirie," he said.
"To see that there's no technical impediments and that their cost projections are around the ballpark is really very pleasing.
"It means a really important economic activity can continue in a much better environmental situation and health situation."
The smelter employs 700 people and is Port Pirie's biggest employer. Earlier this year, a report titled the Nyrstar Port Pirie Smelter Public Environmental Report documented the need for the upgrade.
It stated that the upgrade was necessary to ensure that it better met environmental standards. The major area of concern was the lead emissions of the plant.