Boliden closer to reopen the Tara zinc mine

Aggrement

Boliden has recently issued a press release where it informs that an agreement between worker’s unions and local management has been successfully reached. This agreement is paving the way for the reopening of the Tara mine on a more financially sustainable footing.

In July 2023, the Tara mine entered a period of care and maintenance due to various challenges, including adverse zinc price trends, operational hurdles, and overall cost concerns. However, through collaborative efforts between unions and management, Boliden was able to secure a breakthrough agreement aimed at enhancing productivity and operational efficiency.

Key points

Key highlights of the agreement include:

–     Optimized mining plan: Reducing transportation distances and maximizing metal output, with an initial annual production rate of 1.8 Mtonnes.

–     Organizational redesign: Streamlining operations and reducing the workforce to approximately 400 full-time equivalent (FTE) employees, down from over 600 during the care and maintenance period.

–     Improved ways of working: Implementing measures to enhance productivity levels and operational effectiveness.

–     Cost reduction: Anticipating a significant decrease in normal cash costs to approximately 100 USc/lb Zinc, compared to 137 USc/lb Zinc in the first half of 2023. This reduction is attributed to an improved energy price outlook and lower benchmark treatment charges (TC).

Moreover, Boliden informs that according to the agreement, there will be one-off restructuring costs of approximately EUR 30 million impacting the second quarter of 2024, alongside previously announced care and maintenance costs. However, Boliden remains confident in the long-term viability and profitability of the Tara mine.

Re-opening

Employees will gradually return to work during the third quarter of 2024, with a comprehensive onboarding and retraining program in place. Production ramp-up is slated to commence in the fourth quarter of 2024, with full production expected by January 2025.

Additionally, Boliden we’ll be reinitiating exploration activities towards the Tara Deep deposit in the latter half of 2024.

Tara mine

Boliden’s Tara mine is Europe’s largest zinc mine and also one of the largest in a global comparison. Since mining began in 1977, more than 85 million tonnes of ore have been extracted up to 2023 when the mine was put under care and maintenance.