The Swedish owner of Tara Mines says it is facing battles on numerous fronts as it grapples with a slumping price for the zinc it produces at its Co Meath operation, as well as mishaps at its other facilities in Europe.
Shares in Boliden fell the most in eight months on Wednesday after it said first-quarter profits would be as much as €60.5 million lower than it had previously expected. About €43 million of this is attributable to issues at Tara, including lower levels of zinc in material extracted from the mine.
More broadly while zinc is used in everything from paint to pharmaceuticals, Boliden and Tara have been hit by a more than 40 per cent slump in zinc prices over the past 15 months amid the general slowdown in the global economy.
In the past “two to three months,” the Tara Mines business had “sustained very heavy losses, both book losses and cash losses, and this [suspending operations] is a way to curtail the cash losses around this,” Boliden chief executive Mikael Staffas told analysts on a conference call on Wednesday. “We will be standing still until we have better conditions. We are looking for better conditions for the zinc price.”
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Taoiseach Leo Varadkar told the Dáil on Wednesday the Government want to ensure the facility could be reopened “as soon as possible”.
Politicians in Meath said the news is “devastating” for the county with former junior minister, Meath West Fine Gael TD Damien English, saying the closure could affect up to 3,000 jobs in the wider economy.
He said the Government had been exploring ways to help the company with its energy costs and there was a meeting scheduled with Minister for Enterprise Simon Coveney next week to “tweak” a support scheme.
“We will work with the company to explore all options to secure the long term future of the mine and employment.”
Asked about the status of such deliberations, the Department of Enterprise did not elaborate beyond saying: “The parent company of Tara Mines has identified a range of operational challenges, a decline in the price of zinc, high energy prices, and general cost inflation as contributing factors to the temporary closure.”
Shuttering Tara, the biggest zinc mine in Europe, had an immediate impact internationally. Zinc prices rose more than 3 per cent in London, the main location for trading in the metal.
Tara Mines made a profit of just over €19.8 million before tax in 2021, according to the most recently filed accounts for the business. Zinc traded at an average price of $3,007 per ton that year. On Wednesday the metal traded at just over $2,300 per ton.
Away from Tara, Boliden’s business has been hit by a fire which shut down production at a site in Sweden.
While the zinc price appears to have been a key factor in the shutting down of Tara, it was not the only one. Mr Staffas highlighted staff and energy costs as other reasons for the decision.
The mine has had sporadic industrial issues over the years. In 2009 close to 700 workers were put on protective notice in a row over cost cutting, a pattern that was repeated in 2013.
The company is “negotiating hard” on power prices, Mr Staffas said.
He declined to say what price zinc would need to increase to for the company to reopen the mine. “We are interested in operating Tara Mines if we make money in Tara Mines,” he said.
