Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Swedish miner Boliden said on Tuesday it will suspend production at Europe’s largest zinc mine in Ireland and lay off its 650 workers within the next month due to “unsustainable financial losses”.
It also flagged it expects a negative impact of 700 million Swedish crowns ($65 million) on its second-quarter earnings before interest and tax as it has been forced to halt output at its largest production unit, the Ronnskar smelter in Sweden, after a fire broke out overnight.
Boliden said the plant’s cell house was completely destroyed due to the fire. Other production at Ronnskar, a major producer of copper, zinc, lead and other metals, had been stopped for safety reasons until further notice.
In Ireland, the company said the Tara mine, which in 2022 accounted for half of Boliden’s zinc concentrate, had been hit by operational problems, declining zinc prices and high energy costs, and its workforce would be laid off until conditions improve.
“In the long-term interest of Boliden Tara Mines, we have taken the decision to temporarily suspend operations and place the mine into care and maintenance,” Gunnar Nystrom, general manager at Boliden Tara Mines, said in a statement.
Boliden’s acquisition of the Tara mine in Ireland in 2004 established it as a prominent zinc and lead producer, with over 2 million tonnes of ore being extracted annually.
The company said its forecast decline in second quarter earnings is also partly due to lower-than- expected ore grades at Tara and its Kevitsa nickel and copper mine in Finland.
($1 = 10.6999 Swedish crowns)
(By Akriti Sharma and Nilutpal Timsina; Editing by David Gregorio)
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