Boliden Finalizes Agreement to Revive Europe's Largest Zinc Mine

After months of negotiations, Boliden (STO:BOL) has reached an agreementwith worker's unions and local management to reopen the Tara operation, which is Europe’s largest zinc mine.

Tara, operated by the Sweden-based mining company, is an underground zinc and lead mine with a production capacity of 2.6 million metric tons (MT) per year, making it the largest zinc mine in the continent.

Located in Navan, Ireland, the Tara mine's reopening follows its closure in July 2023 due to a combination of challenges, including unfavorable zinc price trends and operational hurdles.

The accord, aimed at ensuring a more financially viable operation, includes substantial changes in work practices and productivity enhancements. Among the provisions is an optimized mining plan aimed at reducing transportation distances and maximizing metal output, with the initial production rate set at 1.8 million MT annually.

This overhaul is also projected to slash the mine's normal cash cost to approximately US$1 per pound of zinc, compared to US$1.37 per pound recorded in the first half of 2023. This reduction is attributed to improved energy price outlooks, lower benchmark treatment charges and heightened productivity levels.

The restructuring effort will entail a one-off cost of approximately 30 million euros, which is expected to have a negative impact in the year's second quarter. It will also involve a workforce reduction, with the number of employees set to decrease to around 400 full-time equivalents, down from over 600 prior to the care-and-maintenance period.

The phased return of employees is slated to begin in Q3, accompanied by an onboarding and retraining program.

Production is set to start ramping up in Q4, with full output expected by January 2025. Despite the anticipated increase in operational activity, Tara is projected to incur an estimated operating loss of 25 million euros per quarter during the second half of 2024, compared to 13 million euros per quarter during care and maintenance.

Exploration efforts at the Tara Deep deposit will recommence in the latter half of 2024.

Don't forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.