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Finnish miner Talvivaara (LON:TALV) has decided to lay off nearly half of its 530-person workforce as it struggles to avoid bankruptcy.
The company, which operates a nickel mine in eastern Finland, announced on Wednesday that the lay-offs will affect 246 workers for an indefinite period of time.
“Lay-offs will support the Company and Talvivaara Sotkamo Ltd’s corporate reorganization and adjust the number of personnel to the current operating scheme under which ore production is temporarily discontinued. Bioheapleaching and metals recovery activities continue in a normal fashion,” Talvivaara wrote in a news release.
In October the company announced that its liquidity position had been seriously weakened to due a declining nickel price and waste water leakage issues.
The company has since been working on securing additional financing and reducing costs; it announced in November that this would likely lead to lay-offs and “may have employee impact on the whole staff.” At the same time, the miner shut down its metals recovery plant and stopped ore production.
In its 2013 Q3 report, the company was EUR 463 million in debt with a debt to equity ratio of 0.97. According to Reuters, analysts estimate that the firm needs about 200 million euros.
The miner’s share price has lost nearly all its value over the past year, dropping by about 95%. With a 17% interest, the Finnish government is Talvivaara’s largest shareholder. But the government is unwilling to cough up the cash and wants private investors to step in.
“The requirement is a market-driven solution where private actors participate in funding in an equal way with the state,” Economic Affairs Minister Jan Vapaavuori said in November, Reuters reported.
