South Australia’s treasurer and energy minister says China is undermining Australia’s smelting industry and that any shutdown would leave national security “very exposed”.
Tom Koutsantonis made the claims on 891 ABC Adelaide when asked about the future of Nyrstar’s troubled lead smelter in Port Pirie.
“I think you should be concerned anytime another government to our north, like China, is doing everything it can to use its taxpayers’ money to bankrupt this smelter,” he said.
“Make no mistake about it, this smelter is under attack. This smelter is having every aspect of its commerciality undermined by a foreign government.”
Tom Koutsantonis says the profitability of Port Pirie’s smelter is “under attack”. (ABC News: Justin Hewitson)
Asked how China was “undermining” the smelter, Mr Koutsantonis said: “They’re buying raw materials at an elevated price, they are discounting the charges for making the materials, and then they subsidise the manufacture of it.”
“At every stage of the operations of antimony and other products that go towards making antimony, which are lead and zinc and everything else we use at the smelter, the Chinese government are doing everything they can to build their state sovereignty around it,” he said.
“That’s fine for them, but for us, in an emergency, if we needed to be able to defend ourselves and use these critical metals to harden our bullets, harden our bombs, harden our armour in our military applications and we have to buy all of it entirely from one country … you would leave Australia very, very exposed.”
Industry viability threatened
Tasmanian Treasurer Eric Abetz said China was making it difficult for smelters in the Western world to be able to compete.
He said some of Nyrstar’s difficulties stemmed from China purchasing ore at spot prices.
“They are then providing the finished product onto world markets with subsidised prices as a result, making it very difficult for smelters in the Western world who operate on a private enterprise system to be able to effectively compete,” Mr Abetz said.
Peter Malinauskas was in Port Pirie last year discussing the future of Nyrstar’s lead smelter. (ABC News: Trent Murphy)
SA Premier Peter Malinauskas said China was making it “very hard” for Nyrstar to remain viable.
“Smelting globally in Western countries with Western country cost bases that aren’t being subsidised by governments are uneconomic, that’s it,” he said.
“That’s the play. You can read about this in a whole range of published journals.
“The Chinese government is very deliberately subsidising their smelting capabilities with the view of reducing treatment charges globally which are the source of revenue for our smelters, to the extent that our smelters become uncommercial and close.”
Mr Malinauskas said in other parts of the world, including Europe and North America, smelters had closed because they were “uneconomic as a result of Chinese subsidies to Chinese smelters”.
“We can’t let that undo our smelting capability as a country,” he said.
The Chinese government has been approached for comment.
Smelter’s struggling finances
Nyrstar Australia has facilities in Hobart and Port Pirie.
The South Australian, Tasmanian and federal governments had to step in last August with a $135 million bailout for the struggling smelters after Nyrstar revealed its operations were losing tens of millions of dollars a month.
In March 2025 Nyrstar’s parent company, Trafigura, told an international business summit its Australian smelters were “uncompetitive assets” that “shouldn’t be in fully private hands”.
About 1,400 jobs will be on the line if the Port Pirie and Nyrstar smelters close down.
On Sunday a Nyrstar spokesperson confirmed it had received a new support offer from the state and federal governments, but declined to provide a timeline on when the company would respond.
Nyrstar says its zinc smelter in Hobart is one of the largest in the world. (ABC News: Maren Preuss)
Tasmanian Business, Industry and Resources Minister Felix Ellis said the state government’s contribution would be $7.5 million.
Mr Ellis told 936 ABC Hobart the “lion’s share” of financial assistance would come from SA and the federal government.
He did not say over what period the money would be delivered because negotiations were continuing.
“Really it’s about making sure that we can get these operations from where they are, which is a challenged financial position like we’re seeing with smelters across the country and many parts of the Western world, through to the other side and viability,” Mr Ellis said.
“There’s a lot of good faith between the three governments and the company to work towards a sustainable future here.”
Mr Malinauskas said negotiations between Trafigura, the federal government and the two state governments “continue in earnest”.
He said smelting capacity was critical to Australia’s sovereignty and its ability to participate in the critical mineral and metal supply chain.
“The federal government needs to be all in on this,” he said.
“Let’s not make the same mistake with smelting that the country made with fuel refining 15-20 years ago.
“If we lose it, it’s gone, and it’s very hard to bring it back.”
Detail on deal lacking
Australian Workers’ Union (AWU) assistant secretary Robert Flanagan told 936 ABC Hobart he had little detail around what the offer contained.
He said the AWU had had discussions with the smelter locally.
“They’re not able to go into any of the details, other than to say there was a revised offer that the company had received on Friday afternoon and that the company would consider their position,” Mr Flanagan said.
He said there was still some anxiety among the workforce, but that “like the union, the workers are hoping this will be resolved sooner rather than later”.
