UPDATE 2-Mining costs, lower smelting fees weigh on Nyrstar

Thu Feb 23, 2012 2:21pm GMT

* 2011 underlying core profit 265 mln euros vs 285 mln poll

* Sees zinc mining output rising by 50-70 pct in 2012

* Treatment charges seen falling in 2012 (Adds CEO comments, share price reaction)

By Robert-Jan Bartunek

BRUSSELS, Feb 23 (Reuters) - Nyrstar, the world's biggest producer of zinc, raised its earnings less than expected in 2011 due to startup costs of its mining operations and said it would probably have to accept further cuts in its charges to process zinc this year.

By focusing more on mining, the Belgium-based group aims to produce 50 percent of the raw material it needs for its smelting activities in the medium term.

Underlying core profit for 2011 rose 26 percent to 265 million euros ($351 million), below the 285 million expected in a Reuters poll of six analysts.

Shares fell as much as 5.3 percent early on Thursday but recovered to trade about 2.9 percent lower at 1407 GMT.

"They had higher start-up costs in mining than expected in 2011. Besides that they were in line with my operational expectations," a London based analyst said.   Continued...

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