Outokumpu set to reopen Tara zinc mine in June

Finnish metals group Outokumpu has said it aims to reopen the Tara zinc mine in June, securing the jobs of the 670 employees who work there, writes Jane O'Sullivan.

At a meeting in Helsinki yesterday, the Outokumpu board approved an improvement programme providing for production to begin again in June. However, it said the decision to restart production would be subject to review again in May.

"The progress made in the programme and the situation of the zinc market will be addressed, among other things, at that time," the company said.

The improvement programme, to prepare the mine for a June re-start, will begin immediately and will involve an initial investment of €15 to €20 million.

The mine, which has been in care and maintenance since it closed in November last year because of weak zinc prices, currently employs 140. But this will increase to more than 400 over the coming weeks, rising to the full complement of 670 when production resumes.

"We are relieved the company has made a decision to recommence operations," said Mr Christy McQuillan, Meath branch secretary with SIPTU. "This paves the way for a real future at the mine."

He said 30 workers a day would be recalled over the next few weeks with more than 400 back at work by the end of April.

Outokumpu said a feasibility study made on the improvement programme confirmed that Tara had the potential to be "a cost-effective, very profitable and long-term operation".

It said progress had also been made concerning other pre-conditions it had set for a restart.

"In particular, the company is pleased with the agreement with the employees concerning the extension of the current labour agreement until the end of 2003," Outokumpu said.

Tara's managing director, Mr Eero Laatio, said Outokumpu needed to see that the recent upward trend in the zinc price was sustainable and would also be watching how the improvement programme proceeds.

But he was "absolutely" confident production would begin at the mine again in the summer. "This is almost like a challenge to all of us to do it right," he said.

Workers too were approaching the task with enthusiasm and confidence, SIPTU's Mr McQuillan said. "All of the indicators show that the second half of the year should see a revitalisation of prices and demand for zinc concentrates which is what Tara produces," he said.

Ironically, news of the mine's re-openingsent zinc prices lower on the London metals markets yesterday.

Meanwhile, Outokumpu said various options for the ownership structure of Tara would be looked at, in line with its strategic decision to exit base metals mining.