Mining group Arcon lost £3.6 million in the first six months of the year, losses which it attributed partly to a 14-week dispute at the Galmoy plant. It compares to a £923,000 profit for the same period last year.

Arcon chief executive Mr Tony O'Reilly Jnr declined to specify how much the dispute cost. One of the biggest costs, he said, was that loan interest repayments kept clocking up. This accounted for more than £1 million.

Arcon said it had rescheduled certain financial obligations because of the dispute. Net debt at the end of June stood at £53.9 million.

The dispute also meant that revenue was greatly reduced. In the six months, the gross value of metal sold was £7.4 million, compared to £9.4 million in 1997.

Arcon exported 42,000 tonnes of zinc to its European-based customers between January and mid-September. Mr O'Reilly said the mine had not been "producing as well as we would have liked since start-up" but Arcon had carried out modifications at the mill and process plant. He said the mine was now running at design levels.

He said that although zinc prices were historically low, the company was making profits at current levels. The four-year agreement which the company reached with mine workers following the dispute would not affect Arcon's profitability.