Boliden: Agreement reached to reopen Tara

Rhea-AI Summary

An agreement has been reached to reopen the Tara mine in a more financially sustainable manner after being put in care and maintenance in July 2023. The agreement includes an optimized mining plan, organizational redesign, and reduction in employees to improve productivity and reduce costs. Despite one-off restructuring costs negatively impacting the second quarter of 2024, the mine is expected to resume full production by January 2025.

Positive

• Optimized mining plan to increase metal output and reduce costs

• Improvements in productivity levels and ways of working

• Ramp-up of production expected to start in the fourth quarter of 2024

• Exploration activities towards the Tara Deep deposit to be reinitiated

Negative

• One-off restructuring costs of approximately EUR 30 million affecting the second quarter of 2024

• Operating profit expected to be negative during the second half of 2024

STOCKHOLM, May 6, 2024 /PRNewswire/ -- An agreement has been reached between worker´s unions and local management which enables the process of reopening the mine at Tara 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.

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 Mtonnes, coupled with an organizational 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 USc/lb Zinc, compared to 137 USc/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 m will negatively affect the second quarter 2024, which together with previously announced costs for care and maintenance of EUR -13 m per quarter gives a total negative effect on operating profit for the quarter to EUR -43 m. 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 organizational 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 m per quarter, compared to EUR -13 m 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.

For further information, please contact: 

Klas Nilsson
Director Group Communications
+46 70 453 65 88
klas.nilsson@boliden.com

Metals for generations to come

Boliden's vision is to be the most climate-friendly and respected metal provider in the world. We are Europe's producer of sustainable metals and, guided by our values care, courage and responsibility, we operate within exploration, mines, smelters and recycling. We are around 6,000 employees and have annual revenues of approximately SEK 80 billion. The share is listed in the Large Cap segment of NASDAQ OMX Stockholm.

www.boliden.com

View original content:https://www.prnewswire.com/news-releases/boliden-agreement-reached-to-reopen-tara-302136558.html

SOURCE Boliden

FAQ

When was the Tara mine put in care and maintenance?

The Tara mine was put in care and maintenance in July 2023.

How many employees will be reduced due to the restructuring?

Around 400 full-time equivalent employees will remain after the restructuring.

What is the expected operating profit during the second half of 2024?

Operating profit is estimated to be about EUR -25 million per quarter.

What is Boliden's vision?

Boliden's vision is to be the most climate-friendly and respected metal provider in the world.