Closure Plans Announced for Cockle Creek Smelter

Pasminco and its Deed Administrators, Messrs John Spark and Peter McCluskey of Ferrier Hodgson, announced today that, as part of the longer term strategy for the restructure of Pasminco, it had been determined that the Cockle Creek smelter in New South Wales will ultimately be closed. Subject to a number of factors, it is expected that the closure will take place between 2006 and 2008.

Pasminco Chief Executive Officer Greig Gailey said: "Cockle Creek remains a marginal operation that does not provide consistent returns on investment. The Cockle Creek smelter does not fit with the strategic vision for a new Pasminco, which must instead focus on a portfolio of world class assets centred around the Century zinc mine in Queensland. In this context, and in the absence of an appropriate sale offer, we are taking the decisive action needed on Cockle Creek to help secure a stronger future for the new Pasminco."

"The closure of Cockle Creek has been timed to achieve the optimal remediation outcome for the site. The exact date will be dependent on capital expenditure requirements, plant performance and market conditions."

Mr Gailey said the decision provided clarity about the site’s future for the smelter’s 360 employees, the local community, suppliers and governments.

"This plan is being announced early to ensure that all parties can plan well in advance for the closure’s ultimate impact and to enable Pasminco to meet its responsibilities to the community and the environment."

Mr Gailey said the company would work closely with individual employees during the transition period.

"Employee entitlements will be met as and when they fall due."

"We will start planning for remediation work immediately," he said. "A comprehensive remediation plan will be developed in consultation with the NSW Environment Protection Authority and other relevant government agencies. It is anticipated remediation will be complete approximately five years after closure."

Until its closure, the Cockle Creek smelter will be part of the new restructured Pasminco. Pasminco aims to operate the site at the peak of its performance over the intervening period while moving towards orderly closure and progressive remediation. Further details on the Cockle Creek strategy will be available in Pasminco Resources’ upcoming Prospectus.

Given the interdependency between Cockle Creek and Pasminco’s Elura mine near Cobar in NSW, Mr Gailey also confirmed that the sale process for the Elura mine was continuing as part of the restructuring strategy for Pasminco. He said that interdependencies between Elura and other Pasminco assets would be protected under any sale agreement.

If a sale was not concluded, Mr Gailey said that Pasminco would retain the mine.

"If Elura is not sold, we will retain the operation and pursue performance improvements to extend the life of the mine. Under either option, the Elura operation is expected to continue for 6-7 years."

For information, please contact:

Trevor Shard
General Manager
Investor & Community Relations
+61 (03) 9288 9186 or
0419 584 515

Stephen Baines
Manager
Public Affairs
+61 (03) 9288 0215 or
0418 992 651


PASMINCO COCKLE CREEK SMELTER - BACKGROUNDER

Pasminco Cockle Creek Smelter is located at the northern end of Lake Macquarie near Newcastle. Operations began at Cockle Creek in March 1897 with the establishment of an orthodox lead smelter, making it the Hunter Region’s first heavy industrial site.

At the turn of the 20th century, zinc became the site’s key product followed in the ensuing decades by sulphuric acid, superphosphate, mixed fertiliser and cement. Since the 1960s, the plant has focused its attention on zinc and lead smelting.

The plant uses the traditional Imperial Smelting Furnace technology. This involves the sintering of sulphide feedstock, fuming of metals in a closed-top blast furnace, condensing of zinc in a hot lead condenser, and final refining of zinc metal and lead bullion.

The smelter’s products are mostly exported to countries in south-east Asia. Zinc is used in the hot dip galvanizing industry to protect fencing, roofs, whitegoods, nails and other products from corrosion. It is also an essential ingredient in items ranging from brass to tyres and even zinc cream to help prevent sunburn. Lead is used primarily in the manufacture of car batteries, as radiation absorption in television screens and other visual display units.

The smelter is located close to residential areas and Cockle Creek, and successive management teams have recognised the need to minimise the operation’s environmental impacts. In the last two years alone, the company has spent more than $15 million on environmental projects. These include the installation of a tail gas scrubber to further improve air quality, and a visible earthen mound and acoustic fence to minimise noise from the plant and reduce fugitive emissions.

Pasminco Cockle Creek Smelter employs around 360 employees.

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