Sticks and stones may break its bones, but
Shortly after a European Union vice-president called it a “slut,” the Swedish base metals producer has posted a Kr30-million (US$2.9-million) profit on revenue of Kr5.1 billion (US$495 million) for the first six months of 2002. In the second quarter, it made Kr13 million (US$1.3 million) on revenue of Kr2.7 billion (US$266 million).
The result is a significant improvement for the company, which lost Kr506 million (US$50 million) on revenue of Kr5.4 billion (US$539 million) in the first half of 2001. That figure included a Kr46-million (US$4.4-million) loss in the second quarter of that year.
The comment about Boliden’s easy virtue came from Loyola de Palacio del Valle-Lersundi, a vice-president and the Transport Commissioner for the European Union. In an interview with the Ondas Populares de Espana (COPE) radio network in Spain, Palacio described the company as “a slut,” saying it was “very Swedish but very filthy.”
Boliden said that if the Commissioner had been quoted correctly, she had “a highly remarkable view of both Sweden and Boliden.”
Palacio was reacting to Boliden’s statement that it would not be assuming responsibility for a fine of Eu45 million (US$44 million) levied against its Spanish subsidiary, Boliden Apirsa, operator of the Los Frailes zinc-lead mine, near Seville. A tailings dam failure at Los Frailes in April 1998 caused flooding in the Rio Agrio and Rio Guadalquivir valleys and required an extensive cleanup.
A Spanish inquiry cleared Apirsa of criminal responsibility in the case in November of last year. Inquiries have been divided on the cause, but most have pinned the blame for the failure on inadequate construction and on a failure to recognize potential geotechnical problems when the dam was designed. Boliden only acquired the mine in 1987 out of receivership, and was not involved in the design or construction of the dam.
Boliden has since said it would be seeking to reclaim costs from “those who are ultimately responsible for the construction of the dam,” though it did not specifically name the dam contractor, Spanish construction firm Dragardos.
Wire reports quoted Palacio as saying Boliden was “known worldwide for throwing all sorts of rubbish into the environment,” and that it “has a nerve in trying to get away with all sorts of filthy things abroad which it would not be allowed [to get away with] at home.”
At presstime, Palacio’s office had not answered an e-mailed request for a comment. Boliden had announced it would ask for a written explanation from the Commissioner.
The improved earnings result in part from increased production at the Ronnskar smelter in northern Sweden, which offset lower metal prices and lower smelting and refining charges. Ronnskar and the Bergsoe lead smelter showed an operating profit of Kr174 million (US$17 million) in the first half of the year.
Boliden’s mining operations were also profitable in the first half, earning of Kr55 million (US$5.4 million). By comparison, the division showed an operating loss of Kr356 million (US$35.2 million) in the first six months of 2001.
The Aitik mine in northern Sweden saw lower production in the first half, as head grades declined. Mining in the Aitik pit moves to higher-grade zones in the second half, and production is expected to rebound. In the immediate Boliden area, where the company operates several base metal mines, production started at the new Storliden mine. Copper and zinc production for the half-year were both substantially higher, at 5,831 tonnes and 28,802 tonnes, for increases of 24% and 12%, respectively.
Mining resumed at the Myra Falls operation on Vancouver Island in March, having been suspended since the end of 2001. Production was lower, but costs have decreased about 20%.
At the Garpenberg mine in central Sweden, zinc production was higher at 19,625 tonnes. A new discovery, announced in April, Lappberget, is being drilled off. The grades in the discovery holes were generally higher than the mine’s reserve.
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