Finnish metals group Outokumpu has announced the immediate cessation of mining at its Tara zinc mine in Ireland in the face of low zinc prices. The closure is part of a bigger plan to exit base metal mining entirely and focus on metals production, fabrication and technology.
In a prepared statement the company said, “The Tara zinc mine in Ireland will be put on care and maintenance until further notice, due to low zinc prices and high production costs. Running down of production commences immediately. Concentrate deliveries will stop in December.”
Tara, the largest zinc mine in Europe, produces about 200,000 tonnes of zinc in concentrate annually. Nearly all of the mine’s 700 employees will be laid of during the stoppage, which is not expected to affect the raw material supply of Outokumpu’s Kokkola and Odda zinc plants. The shortfall will be made up via third-party purchase agreements. Production will be restarted when zinc prices improve sufficiently; before then, maintenance and preparatory development work will be carried out.
Talks are also underway with the union at the Hitura nickel mine in Finland regarding the possible closure of that mine. The Nikkel og Olivin nickel mine in Norway will be closed next spring as the orebody is depleted.
Outokumpu’s other mines include the Pyhasalmi zinc-copper mine in Finland, which churns out about 20,000 tonnes of zinc and 5,000 tonnes of copper, and the Black Swan nickel mine in Australia, where production is about 10,000 tonnes annually.
Canada’s RBC Capital Markets has been appointed to advise the company on how to release the capital from it’s the assets. Options include selling the operations in whole or in part, or forming joint ventures. In the case of Black Swan the company may elect to mine out the high-grade ore body over the next few years.
The company will also halt all exploration and development outside its operating mines. The projects will be sold, optioned out or closed by the end of next year. About 78 jobs will be lost.
The one-time costs of the program is pegged at about US$12 million.
During the recent third quarter, Outokumpu posted a loss before extraordinary items of US$7.2 million, compared with a profit of US$81 million a year earlier.
Be the first to comment on "Outokumpu eyes exit"