BRUSSELS: Nyrstar has ended a seven-month search for a chief executive, turning to a mining industry veteran to try to improve operations at one of the world’s largest zinc producers.
The Belgian listed company said Bill Scotting would join next month. Mr Scotting is chief executive in the mining division of ArcelorMittal, the steelmaker.
Nyrstar has admitted to problems with its mining operations, saying they were underperforming relative to its larger metals smelting business.
The metals producer occupies a leading role in zinc supply, a lucrative area for commodities trading houses. Trafigura, one of the largest commodities traders, last year stepped up its influence at Nyrstar, building up a 15 per cent stake.
Zinc accounts for about 70 per cent of Nyrstar’s profits.
Analysts at Macquarie said Mr Scotting would be the first chief executive at Nyrstar with a background in mining rather than metals processing and said he should be able to “salvage some value from the significant investment in mining” that Nyrstar had made in the past five years.
The group owns nine mines, which feed its smelting operations. Mining accounted for a quarter of earnings before interest, tax, depreciation and amortisation last year.
“The beleaguered mining segment is in desperate need of fresh ideas and new guidance,” Macquarie said. “Although the group’s investment programme is heavily skewed towards the metals processing segment over the coming years, we are comfortable that the company’s bench of experience in that area is already deep and strong enough to support [Mr Scotting] in an area where he has had less exposure.”
Shares in Nyrstar rose more than 8 per cent in Brussels.
Nyrstar was created in 2007 through the combination of the zinc smelting and alloying operations of Zinifex, an Australian mining company, and Belgium’s Umicore.
Former chief executive Roland Junck, who left the company last year, led the moves into mining but subsequently invested more heavily in Nyrstar’s downstream operations, including a A$500m redevelopment of its Port Pirie smelter in Australia.
Reports in Australia on Monday also suggested Nyrstar had reached a deal with authorities to support redevelopment of another smelter in Tasmania.
Trafigura has said its holding in Nyrstar is a financial investment. After accruing its 15 per cent stake Trafigura also put forward two candidates who were elected to Nyrstar’s board in April, in spite of opposition from Nyrstar, which said one was not suitable to be an independent director.
