Arcon back in black with €1m profit

Rising metal prices and increased production dragged listed mining group Arcon back to profit for the first time since the second half of 1999.

The company, 72 per cent-owned by Sir Anthony O'Reilly and his family, reported a pre-tax profit of just over €1 million in the six months to the end of June compared to a loss of €4.96 million in same period last year.

Turnover after smelting charges rose 68 per cent to €18.4 million, with 78,100 tonnes of concentrate shipped from the Galmoy mine, an increase of 25 per cent on the year-ago period.

The figures were boosted by a 20.8 per cent increase in the price of zinc, which accounted for just over 85 per cent of the concentrate shipped from Galmoy.

The price of lead, which makes up the balance, has risen even more dramatically, up 65 per cent on the same time last year.

On the other hand, unit smelter charges declined.

Mr Peter Kidney, who succeeded Mr Kevin Ross as chief executive this month, said the company had made "significant advances" in the first half of the year. "We have made good progress in achieving our main objectives of extending the mine life and maximising production, while lowering unit operating costs," he said.

Mine upgrade work saw lead production treble in the period, allowing the company to benefit from the strong price for the metal. The mine's improved production performance came despite a strike at a maintenance subcontractor, which limited further increases in productivity.

The bottom line was helped by a €524,000 fall in interest payable as a result of the life of the mine being extended to 2010 due to the planning permission secured for a new section of the mine. The company says it has identified further geological anomalies, which will be explored.

Chairman Mr Tony O'Reilly said the outlook on zinc and lead prices for the rest of the year was positive and further production increases were likely in the second half following the resolution of the industrial dispute at the maintenance sub-contractor.