It's Not Easy Being Green: Zinc Producers Fight Carbon Tax

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Green, Non-ferrous Metals

The Australian government plans to introduce new carbon taxes in 2010, but the world’s largest zinc producer worries that emissions trading could create major waves in their company. Created to limit greenhouse gas emissions, the carbon pollution reduction scheme might prove too difficult and cause Nyrstar to close some Australian smelters. Although Nyrstar owns smelters in other countries, a 40 percent majority of their zinc and lead production takes place in Australia.

As part of the Australian government’s efforts to reduce greenhouse emissions, companies will buy and trade a limited number of permits to emit the gases held responsible for global warming. Nyrstar, however, considers these efforts impractical for their smelters in Tasmania and Southern Australia, calculating that “it wouldn’t be sustainable” to keep them in business with the additional $45 million cost in American dollars ($70 million in Australian dollars). Nyrstar chief operating officer Greg McMillan declared earlier this week that the new laws would keep the company uncompetitive in international markets — and lead to 3,000 lost jobs.

“There’s a big question mark over the viability of these operations because we operate on a global market where prices are determined on the London Metals Exchange and we have no ability to pass the carbon tax on to our consumers,” McMillan told The Associated Press. “The world’s demand for zinc and lead is not going to decline if our smelters shut down; that supply will be taken up by other operations in parts of the world that don’t have the same price for carbon as an impost on production … Most likely, that will happen in China or India where they have less stringent environmental regulations and you will actually produce more tons of CO2 per ton of zinc.”

Although aluminum, steel and cement producers are known for much heavier pollution, Australian zinc producers consider themselves hit the hardest with the new scheme. Unlike more “emissions-intensive” industries, Nyrstar doesn’t qualify for any government assistance in their conversion to greener practices. Australia’s climate change minister, Penny Wong, told the Senate this week that the government would consult with Nyrstar and other apprehensive companies before releasing final plans for the emissions trading strategy.

–Amy Edwards

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