February 5, 2015 / 7:14 AM / 3 years ago

UPDATE 1-Mining business weighs on Nyrstar results

* 2014 core profit 280 mln euros vs 291 mln expected

* Mines 278,000 tonnes of zinc, below guidance

* Smelting business produces at top end of guidance (Adds production details, outlook)

BRUSSELS, Feb 5 (Reuters) - Belgium’s Nyrstar, the world’s largest producer of zinc, reported on Thursday a core profit below expectations for 2014 as its mining business performed worse than expected.

The group said it mined 278,000 tonnes of zinc in concentrate in 2014, just below its production guidance range of 280,000 to 310,000 tonnes.

Core profit in its mining business, excluding a one off, fell 44 percent from last year as Nyrstar made less from metals other than zinc in concentrate, such as copper, silver and gold.

Production was also hit by a strike in Mexico and faulty equipment at its mines in Tennessee.

Nyrstar extended its mining guidance of 280,000 to 310,000 tonnes of zinc in concentrate to 2015 but lowered its guidance for gold and silver.

Nyrstar entered the mining business in 2009 to expand its access to raw materials, but it has suffered setbacks on its way to making its mines more profitable.

While in 2012 Nyrstar made almost half of its core profit from mining, it was only about a quarter in 2014.

The group’s smelting business performed much better, as the company produced 1.09 million tonnes of zinc, up 1 percent from the previous year and at the top end of its guidance range.

The average price for zinc, a metal which is often used to shield steel from corrosion, was $2,164 in 2014, an increase of 13 percent compared to the previous year, Nyrstar said.

Nyrstar kept its guidance of smelting 1.0 to 1.1 million tonnes of zinc in 2015.

Overall, core profit rose 51 percent to 280 million euros ($317.72 million), below the 291 million expected in a Reuters survey of five analysts.

Nyrstar’s numbers included a 43 million euro gain from the settlement of the silver stream at Campo Morado with Silver Wheaton, which was announced in January. ($1 = 0.8813 euros) (Reporting by Robert-Jan Bartunek; Editing by Subhranshu Sahu and Muralikumar Anantharaman)

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