4 July 2022 in Dossier Trafigura, Industry


The series of articles published in collaboration between Gli Stati Generali and IBI World is really starting to hurt. On 28 June, in Brussels, the General Meeting of Shareholders of Nyrstar NV (a mining company about which we wrote in January – https://ibiworld.eu/en/nyrstar-the-agony-of-the-giant-in-the-claws-of-trafigura/) is taking place: a company that was emptied of its substance, according to the minority shareholders, in a non-transparent and certainly damaging operation for the company itself. Author of the operation: the multinational group Trafigura, based in Switzerland and Singapore.

We went to the meeting, invited by several shareholders, duly accredited, in order to ask some uncomfortable questions. Nevertheless, things turned out differently than we expected: at the entrance, Trafigura’s bodyguards prevented us from entering. We asked the lawyers, they showed up at the entrance, and again we were prevented from entering: we let you imagine how. Furthermore, we get no explanation.

This action is in line with an established practice in Trafigura’s relations with the public. Indeed, the local media routinely desert similar events, which are important because they are the only chances the shareholders have to hold the board of directors to account, through detailed questions, for Nyrstar’s policy. We stood outside the meeting room and were able to learn that none of the questions about the board’s conduct was satisfactorily answered: they were dashed against a wall of evasive answers, couched in lawyer’s language.

Yet, our main question would have been very simple: Trafigura signed an agreement with the Russian oil industry that has the effect of circumventing sanctions (https://ibiworld.eu/en/trafigura-putin-and-those-useless-sanctions/). Is this agreement still valid? Does it also apply to zinc processed by Nyrstar? No answer. Another question, put to the board of directors by minority shareholders, concerns the Langlois zinc mine in the Canadian region of Quebec, which has been put on care and maintenance) since December 2019[1]; one of the representatives of the minority shareholders, Joachim Vansanten, reports that in 2018 the company discovered the potential presence of 20 million tonnes of zinc ore in the deposit. The board of directors of Nyrstar, which included several Trafigura representatives, despite the fact that Nyrstar is in industrial crisis, decidedat the time not to disclose the discovery to the market.

Only two further drillings would be necessary to confirm the size of the deposit, thus being budgeted for 2019. However, nothing was done before the corporate restructuring, thanks to which Trafigura comes to control 98% of Nyrstar (vs 24% before the restructuring)[2]. At this point, Nyrstar executives do not know whether any further drilling has taken place. Trafigura then acquires 100% of the Nyrstar Canadian activities (thus including the Langlois site): Breakwater Resources Ltd, Nyrstar Canada (Holdings) Ltd and Myra Falls Ltd in fiscal year 2020 (1 October 2019-30 September 2020)[3].

The transaction price is $22 million; the value of the Breakwater Resources asset alone is between $100 and $500 million[4], while the value of the Langlois zinc could be in the billions (20 million tonnes at 12%, with the zinc price at $4000 per tonne, would imply a market value of zinc metal of $9.6 billion). Again, no response.

During a break in the meeting, the minority shareholders issued a press release, picked up by the Belgian media, complaining about the intolerable treatment of us in the press[5]. No response. We continue, of course.


[1] https://www.canadianminingjournal.com/news/zinc-copper-nyrstar-puts-langlois-mine-on-care-and-maintenance/

[2] https://www.spglobal.com/marketintelligence/en/news-insights/trending/kzbmogz4vbgbcp-jkgs9bg2

[3] Trafigura Annual Report 2020, p. 103, header 40

[4] https://sedar.com/search/search_form_pc_en.htm

[5] https://www.lalibre.be/economie/entreprises-startup/2022/06/28/consternation-lors-de-lassemblee-generale-de-de-nyrstar-2S7EOHDCPFGUHIBE44BPKEVM2Y/ ; https://www.debestuurder.be/nieuws/pers-niet-welkom-op-algemene-vergadering-nyrstar

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