Monday 10 December 2018

Tara Mines profits soar to €96m on hike in zinc and lead prices

Tara Deep: The Navan operation is one of the world's largest zinc and lead mines
Tara Deep: The Navan operation is one of the world's largest zinc and lead mines
John Mulligan

John Mulligan

A surge in zinc and lead prices last year saw profits generated by the Boliden-owned Tara Mines in Navan more than double to €96m in 2017.

The lead and zinc mine in Co Meath is one of the largest in the world and employs more than 600 people.

The Swedish owner has previously outlined plans to extract ore from the mine with its Tara Deep project, which will make it one of the world's deepest.

Accounts just filed for the Irish operation show that turnover rose almost 27pc to €276m last year. That was despite the volume of ore produced from the mine falling to 2.3 million tonnes last year from 2.6 million tonnes in 2016.

Boliden noted that during 2017 average zinc prices climbed 51pc to $3,166 per tonne. The average price of lead increased by a third, to $2,383 per tonne.

"While the outlook for the mine's future remains positive, current global and economic conditions require the group to remain focused on productivity improvements and control of its cost base," the directors of the company noted.

The performance since last year may have been tempered somewhat during 2018, however.

The London Metal Exchange was yesterday quoting a spot price of $2,505 per tonne of zinc and $1,905 for lead - both significantly lower than the average prices achieved during 2017.

Boliden recently reported that during its third quarter, operating profit decreased by 308m Swedish kronor (€30m) to 2.02bn Swedish kronor (€197m) as a result of lower metal prices and reduced volumes at Tara and another mine it operates.

"The lower prices had both a direct negative effect on the profit, and a negative effect on the profit as a result of the definitive pricing of previous deliveries," it noted.

Boliden added that production at Tara during its third quarter was hit by planned maintenance and lower zinc and lead grades. The Tara Deep project at the Navan mine aims to prolong its life as Boliden hunts for new lead and zinc ore.

The plan envisages a more than €40m investment that will unlock the ore at depths of up to 1.9km, which will make the mine one of the deepest in the world.

Tara Mines opened in 1977 and the new reserves could extend its life span by as much as another 20 years.

In its annual report earlier this year, Boliden noted that it has already been drilling from the surface towards Tara Deep.

It has also increased the inferred mineral resource at the new site to 13m tonnes from 10m tonnes.

"A very comprehensive programme of improvements to the geological models of the ore and the design of the mining rooms has been carried out at the mine during the year," it noted.

"Overall, this work has resulted in Tara's mineral reserve now being larger than for many years, but the tonnage added to the mine's reserves is primarily relatively low grade tonnage, and the average grades have, therefore, fallen."

Boliden's mining and smelting activities are focused on Scandinavia as well as Ireland.

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