Shares digital

The metal recycler is in hot pursuit of finance as costs shoot up

by Dan Coatsworth

Development costs have risen a further $10 million to $179 million at ZincOx Resources’ projects to recycle steel waste into zinc. ‘Costs are rising at a huge pace. We are getting better figures back for project items, which is why it’s important to get long-lead items tied down now,’ says chairman Andrew Woollett.

The cost of developing a recycling facility in Ohio and the St Louis-based Big River Zinc refinery previously increased by 33% last October on revised supply estimates. Woollett says ZincOx is close to securing financing for the US projects. ‘The management has been focused on the US funding since completing the $120 million debt financing at the start of 2008 for a zinc mine in Yemen. We are fairly confident of being able to announce a deal soon,’ he adds.

Concurrent feasibility studies will be conducted on recycling plants in Turkey and Thailand. Either project, combined with the recycling plant in Ohio, will provide enough zinc to fill the St Louis refinery. It is about to apply for a permit to store electric arc furnace dust in Turkey, providing a stockpile of feedstock that will become zinc.

Talks have begun to build a zinc smelter in Malaysia, taking advantage of a large hydro-electric generation scheme. ‘Electricity is one of the biggest costs of metal production. The new power projects in Malaysia’s Bintulu area provide an ideal opportunity to secure long-term energy supply,’ said Woollett. Rio Tinto is also in Bintulu for the same reason, taking advantage of the power generation to launch an aluminium smelter in 2010.

Shares says: Expect a strong run on the shares once the US financing is secured.