State Aid Is Not the Answer to Trafigura’s Threats Over Europe’s Zinc Industry
- Kris Vansanten
- 13 hours ago
- 3 min read
Like nuclear energy, zinc is a strategic resource. The critical metals that Nyrstar extracts as by-products of zinc smelting may be even more vital to a country’s autonomy.
The applause for Prime Minister Bart De Wever’s plan to recover Belgium’s nuclear power plants had barely faded before the next strategic sector came knocking at the door of 16 Rue de la Loi.
According to Richard Holtum, CEO of the Singapore-based commodities giant Trafigura, the metal-processing industry is the next sector Europe must protect if it does not want to surrender its autonomy. His appeal came barely two weeks after the Prime Minister hosted a delegation from zinc smelter Nyrstar and Trafigura in his office.
The discerning reader will recognise in Holtum’s appeal a clear warning to De Wever and his European counterparts: unless governments step in urgently, the closure of Europe’s metal smelters will become inevitable. This from the very Singaporean company that now presents itself as the guardian of Europe’s strategic sectors, despite having shifted Nyrstar beyond Belgian and European control in 2019.
That De Wever received Trafigura with due ceremony therefore raised many eyebrows, not least among Nyrstar’s minority shareholders. For more than seven years, they have been fighting to reverse Trafigura’s restructuring of Nyrstar so that the zinc smelter might return to Belgian ownership.
Déjà Vu
There is a striking sense of déjà vu. The parallels between Electrabel and Suez, on the one hand, and Nyrstar and Trafigura, on the other, are difficult to ignore.
As with nuclear power, zinc is a strategic resource. Equally important — and perhaps even more so — are the critical metals that Nyrstar refines as by-products of zinc smelting. They are indispensable for technology, the energy transition and defence.
In both cases, these are crown jewels of the Belgian economy that the country knowingly allowed to slip from its grasp.
In both cases, companies are threatening to close plants because they are allegedly no longer economically viable unless governments step in with taxpayer support.
There is, however, one fundamental difference. Electrabel was not unlawfully sold to France’s Suez. Nyrstar, by contrast, fell into Trafigura’s hands through what is alleged to have been a fraudulent restructuring. Alongside ongoing civil proceedings, Belgian authorities continue to investigate the transfer of Nyrstar’s assets to Trafigura.
Against that backdrop, beyond the obligatory social media photograph of the Prime Minister posing alongside the company’s management, a critical reflection might have been appropriate.
A Questionable Reputation
In the United States, President Donald Trump recently announced a multibillion-dollar deal: Trafigura is selling Nyrstar’s operations in Tennessee to Korea Zinc. The transaction includes billions of dollars in support from the United States itself — a geostrategically significant deal securing long-term access to critical metals.
That Trump, who often allows power politics to prevail over the rule of law, is rolling out the red carpet for Trafigura is hardly surprising. Trump is not troubled by the company’s questionable international reputation.
What is remarkable, however, is that Belgium also appears to show little critical distance towards such a counterpart — especially now that Trafigura is threatening the closure of yet another strategic sector on the European continent. Is it merely coincidence that the company is now relocating its European headquarters to Bermuda?
If the Belgian government does not wish to be cornered, subsidies and state aid are not the answer to Holtum’s threats. A far stronger signal would be to enforce existing legislation rigorously and to sanction companies that disregard the principles of sound corporate governance.
And if Belgium also finds the courage to correct the mistakes of the past, only then will it truly stand a chance of safeguarding its strategic autonomy in the long term.
(Translation of op-ed published in De Tijd)
