Revenues rise at Tara Mines but pretax profits down

Turnover at the company that operates Tara Mines rose by 7.9 per cent last year but pre-tax profits more than halved due to the impact of changes in its pension scheme, a slight decline in production levels and continued volatile pricing for zinc and lead concentrates.

The mine, which is located near Navan, Co Meath, is Europe’s largest and the world’s ninth largest zinc mine.

According to recently-filed accounts from the Swedish-owned Tara Mines Holdings and subsidiaries, revenues rose from €174 million in 2013 to €187.8 million last year. However, pre-tax profits were down from €19 million to €8.8 million, with the single biggest factor being a €24.7million exceptional gain in 2013 related to its pension scheme.

Revenues from EU countries amounted to €129.6 million versus €130.7 million a year earlier, the group said.

Operating profits from continuing operations of €8.3 million were recorded as against €20.7 million in 2013.

The group said the average price for zinc rose 13.3 per cent compared to 2013 while the price for lead fell 2.2 per cent. It said currency fluctuations had a significant bearing on its financial results.

The accounts show that changes made to the company’s defined pension plan, which were implemented in 2013, resulted in an exception gain of €859,000 in 2014 versus €24.7 million a year earlier.

The company’s directors said its pension deficit increased year-on-year in 2014, reflecting the underperformance of assets and an increase in liabilities.

Production for 2013 was 2.3 million tonnes of ore compared to 2.5 million tonnes a year earlier. The group said that as mining operations move further away from surface processing facilities, new challenges are faced with continued investment required in the years ahead.

“Current reserves indicate a mining life through 2021. While the outlook for the mine’s future remains positive, current global economic and market conditions require the group to remain focused on productivity improvements and control of its cost base,” the directors said.

Production at the mine, located 2km west of Navan, began in 1977, and since then more than 80 million tonnes of ore have been mined.

The group said it had 642 employees at the end of 2014, compared with 691 a year earlier. Staff costs, including wages and benefits, totalled €59 million last year.

Tara Mines Holdings, which acquired the mine from Boliden in early 2004, holds seven state mining leases and licences, having renewed them in 2013. One of these licences is due to expire in June 2021 with the others expiring at the end of 2023.