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Zinc miner Pasminco calls it quits

By CNN's Geoff Hiscock, Asia business editor

SYDNEY, Australia (CNN) -- Troubled Australian zinc and lead miner Pasminco has gone into voluntary administration after failing to win agreement from its lenders for a debt reprieve.

The company, which has debts of about $1.4 billion and up to $400 million in currency hedging losses, has been hard hit by the tumbling price of zinc and a fall in global demand for metals.

Pasminco is the world's largest zinc and lead producer and has mines and smelters in Australia, the Netherlands and the U.S.

These will continue operating under the administrators, corporate recovery firm Ferrier Hodgson.

Most of Pasminco's 3800-strong workforce will be kept on, administrator John Spark said Thursday.

Shares suspended on ASX

Pasminco shares were suspended on the Australian Stock Exchange Thursday morning after the company made its decision to enter administration on Wednesday night.

Chief executive Greig Gailey said it was the only option for Pasminco, given the uncertainties about its future access to credit.

He said it was clear some lenders were unwilling or unable to enter into a six-month "standstill agreement" by the end of September that would have given Pasminco some breathing space.

Pasminco last week reported a net loss of about $360 million. At the time it said the global economic slump, reduced metals demand and the fall in zinc prices to a record low of $805 a ton was hurting it.

Restructure announced in July

In late July the company said it would sell its Australian mining assets and convert itself into an international smelting business as part of a major restructure.

It aimed to sell its giant Century mine in Queensland and several underground mines, including one in Broken Hill.

Pasminco's collapse adds to the list of high-profile Australian companies to strike trouble in recent months.

Domestic airline Ansett was cut adrift by its parent Air New Zealand last week and is also in administration, with 16,000 workers at a standstill.

Insurer HIH and telco One.Tel are among other corporate disasters in Australia this year.

• Pasminco

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