An in-principle deal has been struck between Nyrstar and the Federal and South Australian Governments for a $350 million upgrade of the lead and zinc smelter at Port Pirie to a cleaner operation.
An advanced poly-metallic processing and recovery facility will be built, which the SA Government says will secure the long-term future of more than 2,500 jobs.
It said the upgrade would substantially reduce lead emissions in the Port Pirie area by replacing the ageing 120-year-old smelter with a much cleaner metal processing operation.
Nyrstar will put in $200 million for the redevelopment and the Federal Government will be the guarantor for private equity investment for the rest of the funding.
The planned work is now subject to feasibility studies, but the transformation is expected to lead to a significant improvement in air quality in the regional city.
The SA Government said it would put $5 million into an immediate clean-up of environmental concerns, including lead dust.
Nyrstar will also put in $3 million annually for a decade to the abatement program.
Lead stigma Local independent MP Geoff Brock welcomed the announcement and said the stigma of lead pollution should now become a thing of the past for the region.
"As former mayor and now the local MP I have longed for this day," he said.
Port Pirie Mayor Brenton Vanstone said it was a pivotal day for the industrial city.
"This state is lacking economic drivers and this is an important economic driver in this state," he said.
Mr Vanstone said the city had been making steady progress on improving the health of local children exposed to lead from the smelter.
"We are not ignorant in relation to the health concerns.
I have spoken to health officials in all stratas of operation and they have said they have seen no child show any clinic symptoms of lead poisoning in the last 12 years, and so therefore we believe that major advancements have been made," he said.
Nyrstar smelter general manager Glenn Poynter said Government backing was vital in planning the changes.
"The Australian Government through through the Export, Finance and Insurance Corporation will assist Nyrstar to attract $150 million in private investment," he said.
"The state has provided these potential investors with insurance and regulatory certainty, demonstrating South Australia works constructively with the private sector to produce good economic and environmental outcomes."