Tara Mines in Co Meath, Europe’s largest zinc mine, is to close for at least three months forcing its 700 workers into temporary redundancy.
The mine’s owners, Finnish mining group Outokumpu, blamed the sharp fall in zinc prices on world markets for the decision to shut the mine.
The company said inflation-adjusted zinc prices have reached levels last seen in the 1930s.
Outokumpu’s third quarter results released today show a dramatic slide in the company’s fortunes. The company reported a third quarter loss of €6 million compared to a profit of €50 million in the same period last year.
A statement accompanying the group’s third quarter results confirmed that the company is exiting base metals mining.
"The decision is in line with the previously announced strategies and is based on the highly capital intensive nature of the mining business and its sensitivity to economic cycles," the company said.
In a statement the company said 'nearly all employees will be laid off for the duration of the stoppage'.
"Production will be re-started when price prospects for zinc have improved sufficiently," the company statement added.
Prior the re-start maintenance and preparatory development work will be carried out.
The Minster for the Environment, Mr Dempsey, who is the TD for the area, said the news had been a "shock and surprise to him".
He added: "It is one of the largest zinc mines in Europe and I don't think it will be closed down completely.
"But even a suspension is very devastating for the workers and the local economy. There is never a good time for this, but this is a particularly bad time of the year for it to happen."
Mr Dempsey said he would be speaking to executives at the mine about the temporary shutdown plan.
Meath’s other high profile TD, former Fine Gael leader Mr John Bruton said the closure is the "worst industrial news to hit Meath in the last 15 years."
Mr Bruton said he hoped that the mine will soon be reopened. "The remaining ore body is vast and is a natural resource of great value. But we must be realsitic about the prospects for an improvement in the zinc price." Mr Bruton said.
He called on the Government to set up a task force help for those affected by the closure to gain alternative employment.