JOHANNESBURG (miningweekly.com) – Australian base metals company New Century has slammed Belgium-headquartered Nyrstar’s request for arbitration regarding legacy contracts to purchase zinc concentrate from the Century mine, in north-west Queensland, and said Wednesday that it had instructed international arbitration firm Clifford Chance to defend the claim.
Nyrstar reportedly submitted its request for arbitration late on Tuesday in connection with the 1.5-million tonnes of zinc concentrate that New Century had put out on tender at the end of last year.
New Century said that it understood that Nyrstar had entered into agreements to purchase zinc concentrate from the Century mine in 2007, but that these agreements had been terminated “some time ago and prior to the company’s acquisition of the mine”.
“New Century was not aware of the existence of any such agreements with Nyrstar when it acquired its interest in the Century zinc mine and copies of those agreements were not provided to the company at the time of the acquisition,” the company stated.
New Century added that Nyrstar alleged that MMG Australia – a previous owner of the Century mine – was the current guarantor to these agreements.
“The company will vigorously defend the claim and the arbitration does not prevent New Century from signing or performing its obligations under any new offtake agreement,” the company said in a statement in which it also announced the execution of its first major long-term zinc offtake contracts.
New Century has entered into an agreement to supply zinc concentrate to Mercuria Energy Trading and Transamine Trading as part of a concentrate tender process, which was initiated in the fourth quarter of 2017.
MD Patrick Walta said that the process had received strong participation from zinc smelters and commodity traders alike, with 11 interested parties submitting indicative offers.
The total tender was for up to 1.5-million tonnes of zinc concentrate from the mine, representing production from about the first three-and-a-half years of scheduled operations.
The offtake agreements with Mercuria and Transamine represented about half of the total of production that was up for tender. The company would also execute offtake agreements with other short-listed customers.
“The execution of these initial offtake agreements represents another exciting milestone for New Century as we progress toward production in the third quarter of this year,” Walta said.