Boliden to Reopen Tara Mine with New Financial Plan

Boliden to Reopen Tara Mine with New Financial Plan

An agreement has been reached between workers’ unions and local management of Boliden, paving the way for the reopening of the Tara mine on a more financially sustainable basis. The mine, placed in care and maintenance in July 2023 due to falling zinc prices, high costs, and operational challenges, will now focus on an optimized mining plan and productivity improvements.

The new plan involves reducing transportation distances, maximizing metal output, and starting with an annual production rate of 1.8 million tonnes. An organizational redesign will see a reduction in the workforce and enhanced working methods. This is expected to lower the mine’s cash costs to approximately 100 US cents per pound of zinc, down from 137 US cents per pound in the first half of 2023. The restructuring is attributed to an improved energy price outlook, lower treatment charges, and better productivity.

However, restructuring costs of about EUR 30 million will impact the second quarter of 2024, along with EUR 13 million for care and maintenance, totaling a negative effect of EUR 43 million. The restructuring involves reducing the headcount to around 400 employees, down from over 600 before the care and maintenance period. Employees will return on a phased basis during the third quarter of 2024, with an onboarding and retraining program.

The mine’s production is set to ramp up in the fourth quarter of 2024, with full production expected by January 2025. The operating profit for the latter half of 2024 is anticipated to be about EUR -25 million per quarter. The mine will also resume exploration of the Tara Deep deposit during the second half of 2024. icon

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