Tara pays €35m for Bula orebody

Tara Mines has completed the acquisition of Bula Ltd's Nevinstown ore body near Navan, Co Meath, for €35 million, following a High Court ruling last month clearing the way for the sale.

Outokumpu, the Finnish parent of Tara Mines, yesterday confirmed it had finally bought the Bula ore body, bringing to a close a lengthy and bitter legal battle spanning four decades.

The legal wrangle with Bula resulted in several court actions over the years, including one case that concluded in November 1996 after 277 days in the High Court, making it the longest hearing in the history of the State.

Bula and Tara Mines first clashed in the 1970s after Bula bought land adjacent to Tara Mines and then explored unsuccessful options to begin mining at the site.

A receiver was appointed to Bula in 1985 when the company had debts of €17 million. Since then, Bula's debts have steadily grown and are now estimated to be around €76 million.

While the deal announced yesterday would not bring any new jobs to the Navan mine, it would extend its lifetime by five years to 2014, Outokumpu said.

In May 2001 Outokumpu first signed a contract with Bula receiver Mr Laurence Crowley to buy the orebody at Nevinstown.

Yesterday, Tara Mines managing director Mr Eero Laatio said he was pleased the deal had finally been closed. He said he had been personally involved with the case since 1986. Now that the Bula orebody was part of the Tara operation, margins would be improved and the acquired area also contained a slightly more concentrated deposit of zinc than Tara's existing mine, he said.

Mr Laatio added the company still planned to recommence mining at Tara Mines in September.

At present, many workers are laid off following a decision to shut down the mine temporarily late last year because the price of zinc had fallen so low.

Around 700 workers were laid off last November. The company planned to begin mining again in June but this restart date was deferred to September. However, the company re-employed around 530 staff, some on job share, in March to work on the mine's redevelopment.

Mr Laatio said that following a recent improvement in the price of zinc, he was optimistic plans to reopen the mine in September would go ahead.

"The latter half of the year is expected to be better than the first half [regarding zinc prices]," he said.

Already zinc prices have climbed by more than 10 per cent compared with the levels they were at when it was decided to shut down the mining facilities at the Navan site last year, he added.