Agreement reached to reopen Tara

An agreement has been reached between worker´s unions and local management which enables the process of reopening the mine at Tara on a more financially sustainable basis.

In July 2023, the Tara mine was put in care and maintenance due to a combination of factors, including negative zinc price development, overall cost level and operational challenges. An agreement between worker´s unions and local management, to significantly improve ways of work and productivity, has now been secured.

The agreement includes among other things an optimized mining plan which reduces transportation distances and maximizes metal output, starting with an annual production rate of 1.8 Mtonnes, coupled with an organizational redesign, a reduction in employees and improved ways of working. Altogether, the normal cash cost of the Tara mine is expected to be reduced to approximately 100 USc/lb Zinc, compared to 137 USc/lb Zinc for the first half year of 2023. The reduction is attributed to an improved outlook on the price of energy as well as lower benchmark treatment charges (TC) coupled with improved productivity levels.

As a result, one-off restructuring costs of approximately EUR 30 m will negatively affect the second quarter 2024, which together with previously announced costs for care and maintenance of EUR -13 m per quarter gives a total negative effect on operating profit for the quarter to EUR -43 m. The restructuring costs are associated with the reduction in headcount to around 400 full-time equivalent (FTE) employees, compared to over 600 employees before the care and maintenance period, as well as significant organizational changes and changes in the ways of working. Employees will commence their return to work on a phased basis during the third quarter 2024 with an onboarding and retraining program.

Ramp-up of production will start during the fourth quarter 2024, and full production is expected from January 2025. Operating profit during the second half of 2024 is estimated to be about EUR -25 m per quarter, compared to EUR -13 m per quarter during the care and maintenance period.

In connection to the decision to reopen the Tara mine, exploration activities towards the Tara Deep deposit will be reinitiated during the second half of 2024.

For further information, please contact:         

Klas Nilsson
Director Group Communications
+46 70 453 65 88
[email protected]