Swedish mining company Boliden reported that an agreement has been reached between worker´s unions and local management which enables the process of reopening the company’s underground zinc mine in Tara, Ireland. In July 2023, the Tara mine was placed on care and maintenance due to a combination of factors, including a low price for zinc, overall costs and operational challenges. The company said it has secured an agreement between worker´s unions and local management to significantly improve ways of work and productivity.
The agreement includes among other things an optimized mining plan which reduces transportation distances and maximizes metal output, starting with an annual production rate of 1.8 million metric tons (mt), coupled with an organizational redesign, a reduction in employees and improved ways of working. Altogether, the normal cash cost for producing zinc at the Tara mine is expected to be reduced to approximately $1/lb, compared to $1.37/lb for the first half year of 2023. The reduction is attributed to an improved outlook on the price of energy as well as lower benchmark treatment charges coupled with improved productivity levels.
As a result, Boliden reported one-off restructuring costs of approximately EUR30 million for Q2 2024, which together with previously announced costs for care and maintenance of EUR13 million per quarter generating a total quarterly loss of EUR43 million. The restructuring costs are associated with the reduction in headcount to around 400 full-time equivalent employees, compared to more than 600 employees before the care and maintenance period, as well as significant organizational changes and changes in the ways of working. Employees will commence their return to work on a phased basis during the Q3 2024 with an onboarding and retraining program.
Ramp-up of production will start during Q4 2024, and full production is expected from January 2025. Operating loss during H2 2024 is estimated to be about EUR25 million per quarter, compared to EUR13 million per quarter during the care and maintenance period.
In connection to the decision to reopen the Tara mine, exploration activities towards the Tara Deep deposit will be reinitiated during H2 2024.
