THE KILKENNY-BASED mining company that has made 221 workers redundant with the closure of Galmoy mines recorded pretax profits of €22.2 million to the end of 2007.

According to accounts recently returned to the Companies Office, Galmoy Mines Ltd recorded almost half of the pretax profits of €43 million recorded in 2006.

The workers at Galmoy – 105 of whom work in the mines – were told last month that the operations at the zinc mines are to cease completely this May. Originally management at the plant announced last September that the mine would be wound down on a phased basis by July 2011.

The viability of the Galmoy mines – which are owned by the Canadian-based Lundin Mining Corporation – is directly related to the price of zinc. In November 2006, the market peaked and a tonne of zinc was selling for $4,580. However, in recent weeks, the price has fallen to less than one-third of this figure – $1,300.

The accounts refer to the drop of price in zinc, stating that in 2008 “there has been a significant decline in both zinc and lead commodity prices which, had this condition existed at the balance sheet date, would have resulted in a permanent diminution in the carrying value of the mineral interests amounting to €14.8 million”.

The accounts show that the company’s turnover dropped in 2007 by 15 per cent from €145 million to €122 million. However, the company’s cost base decreased by only 2 per cent to €99.9 million.

Siptu’s national industrial secretary Gerry McCormack said yesterday that the company’s profits for 2006 and 2007 “are not surprising or unusual given the price of zinc then, but now the price has gone through the floor and it isn’t viable for them to continuing mining at the current prices”.

“We are disappointed that the mine is closing, but we understand the economics of it only too well.”