The Netherlands – Nyrstar’s zinc smelter in Budel will be put in mothballs from 1 September until further notice. Or in professional terms: in care and maintenance. Nyrstar’s zinc production has been under pressure for some time now due to the much higher electricity prices. The company cannot pass these costs on to the customer because the prices are determined on the world market. As a result, margins are evaporating.
Previously, Vice President Europe and USA Guido Janssen only saw a chance of survival by taking a flight forward. ‘The global zinc market competes on cost levels and electricity is the defining cost item,’ he said in Industrielinqs Magazine. ‘We have hardly any CO2 emissions ourselves as we are fully electrified, but pay for the emissions at the power plants. That sounds strange if you run completely on green energy but you pay the market price. The compensation for this is much higher in countries like Germany while we pay the same market price or higher. As a result, prices are already skewed at the European level.’
Janssen sees a way out in speeding up the process of making his sites, including the one in Budel, more sustainable. The electricity that we purchase is 100% from renewable sources. Furthermore, by increasing the processes that use electricity, we can use our production process for flexible demand management. We already invest in solar and wind energy, have signed up for offshore wind farm Hollandse Kust West. And so we can also deploy our production as a virtual battery. This enables us to produce up to 150 percent when there is a lot of sun and wind and to switch back when there is no sun or wind. In this way, we think we can not only save on our costs, but also help to keep the Dutch energy network in the air. And better able to absorb the green energy peaks and troughs. This is more topical than ever, given the grid operator’s recent decision to temporarily ‘lock up’ the electricity grid in Brabant and Limburg for new connections. Of course, we need extra high-voltage capacity to make the grid more flexible, but local upgrading is still cheaper and quicker than upgrading the entire Dutch grid.
The Budel site has another trump card up its sleeve. The first step in zinc production, the burning of the zinc concentrate and zinc oxide, is an exothermic process. Nyrstar already uses these temperatures for the production of steam for the other processes. But that steam can of course also be used to produce electricity. However, there is an additional challenge in these projects: the materials required are either hard to come by or very expensive.
Production in Budel will stop for the time being. Nyrstar Budel’s nominal capacity is [315ktpa] zinc, but the smelter has been running at reduced capacity since the fourth quarter of 2021. Nyrstar’s sites in Balen (Belgium) and Auby (France) will continue to operate at partially reduced capacity, as already announced last year, and continuously adjust their production.
No layoffs are planned as a result of care and maintenance. Employee tasks will be reviewed and concentrated on maintenance, training and other essential activities.
The announcement follows consultations between Nyrstar’s management and the company’s works council.