The future of Nyrstar’s Budel zinc smelter in the Netherlands is uncertain after the group launched a review against a backdrop of soaring energy costs and geopolitical instability.

Trafigura-owned Nyrstar said on September 24 the review will consider future options for the site which produces zinc and zinc alloys, sulfuric acid and ‘Budel Leach Product’ — containing lead and precious metals used as a raw material by secondary smelters.

Nyrstar’s announcement came just a month after it completed a 71-day major shutdown and maintenance programme at Budel. Key tasks included the installation of new absorption towers for sulfuric acid and works on the sulfuric acid plant.

However, the global multi-metals business said its review was needed following the Dutch government’s national budget for 2027, unveiled on September 15.

Nyrstar said the government’s decision not to include provisions for grid cost mitigation for energy-intensive industries in the budget would put Budel under further pressure.

The Budel review is set to ramp up uncertainty on the global sulfuric acid market, as exclusively reported by Batteries International last April.

Nevertheless, Nyrstar said the plant’s competitive position has come under increasing pressure over recent years amid extremely challenging conditions for zinc smelters globally.

Chinese overcapacity, intense competition for feedstock, historically low treatment and refining charges, and elevated European energy costs are placing the entire Western smelting industry under severe pressure, the group said.

These challenges are compounded by high total energy costs in the Netherlands and differences in competitive conditions compared with neighbouring countries.

The group said that while it recognised steps taken to address the competitiveness of energy-intensive industry in the Netherlands, its assessment was that the overall budget framework did not sufficiently address the structural total energy-cost disadvantage faced by Budel compared with neighbouring European markets.

CEO Guido Janssen said Budel’s operations would continue as normal while the review is underway, but warned operations continued to face significant pressure in terms of tough market conditions, elevated energy prices and historically low treatment and refining charges over a sustained period.

“The operation is losing money every year and the conditions for next year look particularly difficult, given rising energy costs, together with a lack of supportive government policy,” he said.

“This is a significant decision point for Budel. The review will allow us to carefully assess the site’s position and the options available, while continuing to consider whether concrete action can materially improve the business case.”

Budel, founded in 1892, is in the southeast of the Netherlands, close to its customers in the country and major industrial centres in Belgium, Germany, Luxembourg and northern France.

Nyrstar did not disclose the latest production figures for Budel. However, analysis published by DKL Engineering’s Acid Plant Database recently said the site produces more than 320,000 tonnes of high-quality sulfuric acid annually, together with around 81,000 wet tonnes of Budel Leach Product.