Vancouver — Paranapanema, Brazil’s largest non-ferrous metals group is aiming to sell all its shares in zinc producer Paraibuna de Metais to Teck-Cominco (TEK-T).
The Paranapanema group inked a memorandum of understanding giving the major a 60-day due diligence period and 90 days to come to a definitive agreement.
Brazil’s second largest zinc producer, Paraibuna saw production of electrolytic zinc cut in half to 47,000 tonnes a year in July, due to government energy rationing following prolonged drought. Following in the footsteps of Teck Cominco, soaring energy prices prompted the company to stop purchasing power from the national grid and instead sell part of the power it generates from the Sobragi hydroelectric plant in Minas Gerais state. Teck Cominco has curtailed zinc production from its Trail facility in BC in order to sell excess power to an energy starved US market for over a year.
Although energy rationing continues in Brazil, the recent drop in energy prices has Paraibuna moving back to a full production rate of 94,000 tonnes a year beginning Dec. 3.
This year the company should produce 74,000 tonnes of electrolytic zinc, virtually all for the domestic market. The company is also Brazil’s on producer of sulphur dioxide.
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