Shock as 650 workers to be temporarily laid off at Tara Mines

TARA Mines in Co Meath is to temporarily lay off its 650-strong workforce and pause operations, the Irish Independent has learned.

Swedish mining giant Boliden confirmed today that it is to place its site near Navan “under care and maintenance”.

It comes after management in Sweden warned earlier this year that sky-high energy costs were a threat to the Irish operation.

A similar move to care and maintenance under a previous owner in 2001 saw the massive mine works shut for 10 months, causing economic shock in nearby Navan and surrounding areas.

“The decision means that production and exploration ceases temporarily at the mine,” the company said.

It described the Tara zinc mine as “a high-cost mine with approximately 650 employees”.

Tara Mines, near Navan in Co Meath, is the largest zinc mine in Europe. The company has previously said its reserves are enough to maintain production until 2027 and potentially beyond subject to investment in deepening the existing mine.

The mines in Co Meath have been a major employer since opening in 1977.

“Boliden is working actively to extend the life of the mine in parallel with ensuring its competitiveness,” the company said.

“The business is currently cash flow negative, due to a combination of factors including operational challenges, a decline in the price of zinc, high energy prices and general cost inflation. Tara will therefore be placed under care and maintenance until further notice.”

The statement concluded: “The decision means that production at the mine ceases and that the workforce is temporarily laid off until conditions of the operation improve.”

In an updated statement on Tuesday evening, the company elaborated on its decision and said it would temporarily suspend operations “within the next four weeks”.

“This decision has been taken to safeguard the long-term future of the company, in response to significant and unsustainable financial losses that the business is currently experiencing,” Boliden said.

“The business is currently cash-flow negative and the losses have been brought about by a combination of factors that have made this decision unavoidable. These factors include operational challenges, a decline in the price of zinc, high energy prices, and general cost inflation.”

General manager Gunnar Nyström said: “In the long-term interest of Boliden Tara Mines, we have taken the decision to temporarily suspend operations and place the mine into care and maintenance. Regrettably, this will mean that up to 650 employees will be laid off temporarily.

“We are acutely aware of the difficulty and disruption that this decision will cause for our employees, and the wider community in Navan, where the mine has been operating since 1977.

“This was not a decision we made lightly, but we simply have to stem the unsustainable cash outflow that we are currently experiencing, in order to safeguard the long-term future of the mine.

“We cannot be definitive about how long this period will last, but we believe that this situation is temporary and we will keep the situation under continuous review. We will remain in dialogue with our employees and stakeholders throughout this period.”

The company said it would “review further supports available to employees during the temporary layoff and will update employees accordingly”.

“The company will also work with the local social welfare authorities and other relevant state agencies to assist employees regarding the supports that are available,” it said, adding that a small number of worker would remain on site to care for and maintain the mine.

In response to the news, the Minister for Enterprise and the Minister for Social Protection issued a joint statement, saying supports are being put in place immediately to assist the workers.

“We have been speaking with Tara Mines in recent weeks and I was due to meet with senior Irish managers next week. Tonight’s decision of the board in Sweden is a shock and my thoughts are with all of the workers affected. The company has tonight told me the board is convinced this is a temporary closure,” Enterprise Minister Simon Coveney said.

“My Department will immediately send in State agencies to assist workers, especially apprentices who are in the middle of their training. Enterprise Ireland has told me it can have a team there on Wednesday.

“Meanwhile the Government will continue to engage with Irish management and the parent company to try reverse this closure.”

Social Protection Minister Heather Humphreys said a dedicated team from the Department of Social Protection is being put in place to provide supports to the impacted workers and their families.

“My immediate thoughts tonight are with the workers and their families who are dealing with this extremely difficult news,” she said.

“My Department of Social Protection is on standby to help in whatever way we can.

“A dedicated team is being put in place and will be out on the ground with the company to provide information on income supports, redundancy entitlements and employment supports for their impacted employees.”

Tara Mines workers have been through major periods of uncertainty previously – in 2008 the entire workforce was put on protective notice and hours cut in response to a sharp drop in international zinc prices and in 2001 the operation was temporarily shut for 10 months.

In February this year the chief executive of Boliden said operations at Tara Mines looked “pretty bad” during the previous autumn as energy prices soared, but that the situation at the lead and zinc mine had since improved.

Releasing full-year results for 2022 back in February, Boliden chief executive Mikael Staffas described Tara as being “very sensitive” to movements in energy prices.

“If I want to be frank, it looked pretty bad for a while in the fall [autumn],” he told analysts in Stockholm. “It looks better now.

“We are managing to handle exactly what it would mean for our cost position.

“There are more things to this – there are also things on the revenue side, and of course premiums and so on play into this picture. I can’t really give you any more detail around that.”

During last year, Tara Mines recorded a higher milled volume of zinc ore, but at a lower grade.

The mining operation has been attempting to reach higher-grade stopes, or tunnel areas, in the mine.

Boliden’s expectation based on current reserves is that Tara Mines could continue at full production until 2028. The mine first started production in 1977.

Boliden’s overall revenue last year jumped 26pc to €7.7bn as metal prices pushed higher. Its operating profit rose 43pc to €1.4bn, while its net profit was up 42pc at €1.1bn.

It was a record year for the mining group.

Global demand for zinc fell 6pc in the fourth quarter of 2022, compared to the corresponding quarter in 2021.

Higher energy prices limited demand for energy-intensive zinc consuming operations, noted Boliden.

The latest set of publicly available accounts for Tara Mines show that it made a €19.8m profit in 2021,compared to a €29m loss in 2020.

Revenue in 2021 jumped 38pc to €235.2m on the back of global demand.

A strong dollar also helped the bottom line, as the mines’ operating costs are in euro but its sales are priced in dollars.

Boliden had been advancing the development of its so-called Tara Deep project at the Meath mine, with a view to bolstering its reserves.

The company said that at full production, current reserves would be depleted by 2027.

It had been planning to spend tens of millions of euro to unlock the potential of Tara Deep, pushing the depth of the mine to as much as 1.9km.

In November 2021, significant volumes of water entered an underground exploration drift at the mine and then entered parts of the operational mine.

That disrupted production in the final part of 2021 and into early 2022.

The flooding adversely hit Boliden’s fourth quarter earnings in 2021 to the tune of almost €24m.

Reporting: Irish Independent