Aurubis scraps complex metallurgy project

Aurubis plant in Hamburg
13.06.2019 − 

Aurubis has pulled the plug on its internal investment project "Future Complex Metallurgy". The group explained the move saying that the project would have entailed "significantly higher investment costs than initially planned". The project was no longer as cost-effective as expected. The investments that had been made to date, around €30m, would be written off in the third quarter. Moreover, the primary and secondary copper producer expects additional adverse impacts on performance this quarter due to the current economic environment.

With the FCM project, Aurubis had been aiming to be able to source raw materials more flexibly. A new metallurgical procedure was to enable the group to expand its raw material sources to include inputs that contain lead, sulphur and copper. The project, first announced in 2017, was also expected to shorten processing times for precious metals and reduce capacity bottlenecks at the company's Hamburg site. Aurubis had originally planned to invest around €320m in the project. Following the construction and start-up phases, the copper producer had hoped to achieve annual earnings before interest, tax, depreciation and amortisation (Ebitda) of around €80m from the FCM project.

“Aurubis had high hopes with regard to the FCM project. It is painful to realise that the external and internal conditions have changed so much that it is no longer possible to implement the project cost-effectively. At a point in the project where crucial orders would have to be initiated, but haven't yet been placed, a firm decision is the best course of action,” explained Roland Harings, who is currently still serving as the company's deputy executive board chairman. As of 1 July, Mr Harings will become chairman of the executive board. His predecessor, Jürgen Schachler, has been released from his contract, which would have run until the end of the month.

Despite its decision to scrap the FCM project, Aurubis intents to carry on with its plans to become a "multi-metal recycler". The acquisition of the Belgian-Spanish Metallo Group in late May was "an important building block in the implementation of the strategy," said the concern. The company still planned to move ahead with internal growth projects as well. “Within the scope of Aurubis’ further development into a multi-metal company and in the course of the Metallo acquisition, other internal growth options are presenting themselves, which we will now review in more depth,” said Mr Harings.

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