On May 3, Boliden announced that an agreement had been reached between worker’s unions and local management which enables the process of reopening Ireland’s largest mining operation – the Tara zinc mine near Navan – ‘on a more financially sustainable basis.’ In July 2023, the Tara mine was put in care and maintenance due to a combination of factors, including negative zinc price development, overall cost level and operational challenges. An agreement between worker’s unions and local management, to significantly improve ways of work and productivity, has now been secured.
Tara in Ireland is Europe’s largest zinc mine and also one of the largest in a global comparison. Since mining began in 1977, more than 85 Mt of ore have been extracted. Boliden acquired the mine in 2004.
The agreement includes among other things an optimised mining plan which reduces transportation distances and maximises metal output, starting with an annual production rate of 1.8 Mt, coupled with an organisational redesign, a reduction in employees and improved ways of working. Altogether, the normal cash cost of the Tara mine is expected to be reduced to approximately 100 US$1/lb zinc, compared to US$1.37/lb zinc 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 (TC) coupled with improved productivity levels.
As a result, one-off restructuring costs of approximately EUR -30 million will negatively affect the second quarter 2024, which together with previously announced costs for care and maintenance of EUR -13 million per quarter gives a total negative effect on operating profit for the quarter to EUR -43 million. The restructuring costs are associated with the reduction in headcount to around 400 full-time equivalent (FTE) employees, compared to over 600 employees before the care and maintenance period, as well as significant organisational changes and changes in the ways of working. Employees will commence their return to work on a phased basis during the third quarter 2024 with an onboarding and retraining program.
Ramp-up of production will start during the fourth quarter 2024, and full production is expected from January 2025. Operating profit during the second half of 2024 is estimated to be about EUR -25 million per quarter, compared to EUR -13 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 the second half of 2024.
