Swedish miner Boliden is all set to reopen its Tara zinc mine in Ireland after reaching a deal with worker's unions and local management to reduce expenses.
Last year, the mine was placed into care and maintenance due to factors such as plummeting zinc prices and high energy costs.
However, a new agreement has been reached to substantially improve work methods and productivity at the mine.
This agreement includes an optimised mining plan aimed at reducing transportation distances and increasing metal output.
The plan starts with an annual production rate of 1.8mt. Additionally, the agreement entails an organisational redesign, a reduction in the workforce and improved working methods.
As a result of these changes, the normal cash cost at Tara mine is expected to drop to around 100 US cents per pound of zinc, a significant decrease from the 137 US cents per pound recorded in the first half of 2023.
This cost reduction is attributed to a more favourable energy price outlook, lower benchmark treatment charges and enhanced productivity.
The reopening will incur one-off restructuring costs of around €30m ($32.3m), impacting Q2 2024.
Together with the costs for care and maintenance, this will result in a total negative effect on operating profit for the quarter of €43m.
The restructuring will see the mine's workforce reduced to around 400 full-time equivalent employees from more than 600 prior to the shutdown.
This reduction will be accompanied by substantial organisational changes and new working methods. Employees will gradually return to work starting in Q3 2024, with an onboarding and retraining programme in place.
Boliden noted that the production ramp-up at Tara, which is Europe's largest zinc mine, is scheduled to begin in Q4 2024, with full production anticipated by January 2025.
Operating profit during the second half of 2024 is projected to be around €25m per quarter, which is an improvement over the €13m per quarter loss during the care and maintenance phase. In line with the decision to reopen the mine, exploration activities targeting the Tara Deep deposit will recommence in the second half of 2024.
