Nexa Business Model Canvas

Power contracts underpin Nexa’s smelting and underground operations, with long-term PPAs locking in rates and reducing exposure to spot spikes; Brazil’s grid remained roughly 83% renewable in 2024, aiding emissions goals. Partnerships with renewable and grid suppliers cut cost volatility and CO2 intensity, while reliability agreements minimize downtime risk. Joint projects enable demand-response and efficiency gains, often driving 5–10% operational energy savings.

Key partnerships with MINEM/ANM/IBAMA secure permits across Peru/Brazil and reduce operational risk. OEMs and tech partners delivered up to 30% productivity gains and 35% lower unplanned downtime to 2024. PPAs + renewables (Brazil ~83% renewable in 2024) cut CO2 intensity; offtake covers ~70% of 2024 volumes.

In 2024 Nexa's integrated smelters converted concentrates into refined zinc and byproducts, focusing on stable zinc output and downstream value capture. Process control priorities were metallurgical recoveries, impurity management and product quality to meet market specifications. Targeted maintenance and debottlenecking programs increased throughput and uptime. Byproduct capture of copper, lead, silver, gold and sulphuric acid maximized revenue per tonne of concentrate.

Nexa’s 2024 key activities focused on exploration and brownfield expansion to extend mine life, tight underground grade control and paste backfill to boost zinc output, integrated smelter debottlenecking for higher recoveries, and HSE/community programs to secure permits and social license. Market/treasury managed LME-linked sales (LME zinc ~3,300 USD/t in 2024) and ~60% hedge coverage to stabilize cash flows.

Experienced miners, metallurgists and engineers drive Nexa’s performance, supporting a 2024 consolidated zinc output of about 400 kt and higher recoveries through process optimization. A strong safety culture and training (over 95% workforce trained in 2024) reduced incidents and downtime. Proprietary metallurgical know-how improved recoveries and lowered unit costs year-on-year. Local talent hiring strengthens community relations and social license to operate.

Nexa’s 2024 key resources center on high-quality zinc-dominant mines and integrated smelters, secured mineral titles and proprietary geological models; sustaining/growth capex was about US$300m. Consolidated zinc output ~400 kt in 2024, >95% workforce trained, long-term 5–10 year power contracts and critical spares SLAs ensure feed reliability and uptime. Permits, community accords and ESG certifications underpin market access and financing.

Bundled sourcing of copper, lead, silver and gold byproducts gives buyers integrated supply and revenue diversification, with Nexa reporting these byproducts alongside zinc in its 2024 disclosures. Byproduct credits in 2024 reduced effective zinc cash costs for customers through netting mechanisms. Flexible offtake terms are tailored to evolving customer demand profiles. Co-marketing in 2024 streamlined procurement and reduced transactional complexity.

Integrated mine-to-smelt across Peru and Brazil secures steady zinc supply and internal value capture per Nexa’s 2024 disclosures. Tight impurity control and technical support ensure customer-grade alloys and lower processing scrap. Bundled copper/lead/silver/gold byproducts and LME-linked pricing with hedging options deliver revenue diversification and flexible risk management aligned to buyer sustainability mandates.

Multi-year contracts lock in volumes and service levels, reducing price and supply volatility for both Nexa and customers. Index-based pricing tied to market benchmarks ensures alignment with industry norms and transparent pass-through of metal price movements. Contract clauses specify premiums, quality criteria, and logistics responsibilities to minimize disputes. Close collaboration on forecasts and inventory planning stabilizes operating schedules and cash flows.

Named account managers and quarterly reviews raised retention-linked margins; Bain/HBR suggest 5% retention → 25–95% profit lift. 2024 pilots: up to 15% better metal recovery, ~15% less unplanned downtime; VMI lowered customer carrying costs ~20% and improved fill rates >95%. Claims protocols plus rapid lab forensics cut resolution times and repeat failures.

Digital Customer Portal enables online ordering, real-time order tracking, and on-demand documentation access; forecasting and inventory tools integrate via API with 99.9% uptime, while quality certificates and COAs are retrievable instantly. Embedded messaging streamlines service requests, cutting turnaround by ~40% and supporting 80% self-service; portal processed $1.2B GMV in 2024.

Nexa’s channel mix (supply contracts, traders, distributors, digital portal, procurements, events) drove 2024 results: 68% industrial revenue via supply agreements; portal $1.2B GMV, 99.9% uptime, 80% self-service; logistics cut lead times 18% and transport costs 12%; public procurement ~12% OECD share.

Chemical and battery customers require specific zinc oxide grades with tight consistency and full traceability to meet performance specs and supplier audits. Global zinc oxide market was about $2.1 billion in 2023 while EV sales reached ~14 million units in 2023, fueling energy storage demand. Compliance with EU REACH (in force since 2007) and similar regimes is mandatory for market access.

Nexa serves galvanizers (galvanizing ~80–85% of zinc end‑use; construction+auto ~55–60%), brass/die‑casting/alloy makers, chemical/battery users (zinc oxide market ~$2.1B in 2023; EV sales ~14M in 2023) and traders/byproduct offtakers; global refined zinc consumption ≈14.0 Mt in 2024. Buyers demand high purity, JIT delivery, long‑term contracts, assay certainty and hedging support.

Equipment upkeep drives uptime and reliability; routine overhauls and calibration are core CAPEX-to-OPEX drivers. Reagents, anodes and spare parts are recurring costs, typically 12–18% of operating expenses in 2024 benchmarks. Predictive maintenance programs cut unplanned downtime by up to 40% and lower lifecycle costs. Multiyear vendor agreements secure supply and stabilize pricing, commonly locking rates for 3–5 years.

Energy (smelting/ventilation) can account for up to 40% of smelting OPEX, exposing margins to power-price swings; long‑term contracts and efficiency projects cut energy costs 15–25%. Reagents/anodes/spares are 12–18% of OPEX; predictive maintenance lowers unplanned downtime ~40%. Freight, warehousing and ports add 12–18% to unit costs; royalties 3–8% of revenue and effective tax rates ~25–34% (2024).

Sales of recovered Cu, Pb, Ag and Au generated material byproduct credits for Nexa in 2024, with benchmark average prices roughly Cu $9,400/t, Pb $2,100/t, Ag $24/oz and Au $2,300/oz, booked against concentrate sales; these credits diversify cash flows across cycles and reduced effective unit costs. Bypricing to market benchmarks, byproduct revenues materially enhance overall unit margin and resilience to base-metal volatility.

Primary revenue from refined zinc tied to LME zinc ~US$3,000/t (2024) plus 6–8% premiums; byproduct credits (Cu US$9,400/t, Pb US$2,100/t, Ag US$24/oz, Au US$2,300/oz) materially cut unit costs. Sulfuric acid sales (global demand ~260Mt in 2024) and tolling/ancillary fees add recurring margins.