Tara Mines to buy assets of Bula Mines

Tara Mines has agreed to buy the assets of Bula Limited at Navan, Co Meath from the receiver, Mr Lawrence Crowley, for £27.5 million (€34.9 million).

The deal, which is subject to court approval, will bring an end to one of the Republic's longest running legal battles, lasting almost 10 years.

The acquisition will make Tara Mines the fourth-largest zinc mine in the world. The Bula lead and zinc orebody at Navan has reserves of about eight million tonnes. Its sale was advertised internationally by Mr Crowley.

In a statement yesterday, Tara's parent, Outokumpu, said the acquisition would allow the company to improve its cost efficiency and consolidate its competitiveness in the lowest cost quartile of zinc mines. The Bula property is beside the north-eastern boundary of the Tara property and contains the upper extension of the Navan orebody.

Last year, Tara produced 152,000 tonnes of zinc concentrates and is increasing production from its south west extension to more than 200,000 tonnes. With the acquisition of Bula, Tara expects annual production to rise to 250,000 tonnes of zinc concentrates from 2004.

The lengthy court battle began following a claim by the directors of Bula Ltd that the then Minister for Energy and Tara Mines were responsible for the failure to bring the lead and zinc mine into production.

Bula Ltd, which was set up to develop the mine, was 49 per cent owned by the State. Other shareholders include Bula founder Mr Michael Wymes and Mr Richard Wood, a Cork farmer and business man.

Tara Mines was the most obvious buyer for Bula given its proximity to the orebody. Bula Ltd has huge debts and it is understood that several banks are owed in excess of £20 million. They will have first call on the proceeds of the sale.